City of Kent insurance rates go up after police officer’s death

City worker compensation insurance rates were hiked 17 percent this year and the deductible raised by $100,000 after large claims because of the on-duty death of Kent Police Officer Diego Moreno and an injury to another officer during the same July incident.

Chris Hills, city Human Resources risk manager, updated the City Council’s Operations Committee on Jan. 15 about Kent’s insurance rates.

“The tragedy had an effect on our comp program,” Hills told the committee.

Moreno, 35, an eight-year veteran on the force, was killed July 22 when, after laying out a strip of spikes to slow a fleeing pickup, he was inadvertently struck by a pursuing Kent Police SUV driven by Officer Mark Williams.

Emiliano Garcia, 16, the driver of the pickup, has been charged as an adult with second-degree felony murder, allegedly causing the death of Moreno by leading police on the dangerous, high-speed chase after shots were fired outside a nearby bar. Garcia is awaiting trial, although a date has yet to be set.

The city’s annual premium for 2019 jumped to $80,184 from $68,674, Hills said. The city’s self-insured retention (similar to a deductible) increased to $600,000 per loss from $500,000.

“They are asking us to take on more of the risk,” Hills said about St. Louis-based Safety National, the company that provides the city’s excess worker comp insurance.

Council President Bill Boyce asked Hills about the increases.

“Do they always raise the rate when we have an adverse event?” Boyce said. “Is that typical of an insurance company?”

Hills offered an explanation.

“This is the first time we’ve had an on-duty (officer) death,” Hills said. “Rates will fluctuate a little bit. They (Safety National) are not finished paying all of the loss that they will pay for in this case. …We have been with them a long time and are a good partner with them. Insurance companies are not in business to lose money so they are trying to get some of that premium back.”

The city has paid $1.1 million to the state Department of Labor & Industries to fund Moreno’s pension, which goes to his widow. The city pays the claim (from its worker comp fund) and Safety National then provides reimbursement (of the amount more than the $500,000 deductible), once the claim is closed.

The claim remains open because Officer Williams is part of the same case and his claim has yet to close. So far, the city has paid $96,750 to Williams for medical costs and time loss compensation. That claim could go as high as $300,000, Hills said. Williams, an 18-year veteran, suffered a severely broken leg that required lengthy surgery after his SUV collided with vehicles in the left turn lane near the intersection of West Meeker Street and Kent Des Moines Road, according to court documents filed against Garcia.

“While the city will cover the costs of Officer Williams’ claim until closure, the entire amount will be reimbursed as both elements of this tragic incident are considered an ‘occurrence’ which I negotiated with the carrier,” Hills said in an email. “This would not be the case if each were considered a separate claim.”

A separate claim in the Williams case would have required the city to pay all of the costs.

Boyce struggled with the rate hikes by the insurance carrier.

“You have years with them – and you think one event – then all of a sudden – bam,” he said.

Hills explained in an email that Safety National has insured Kent for 22 years.

“They have consistently been the lowest cost provider of excess workers compensation insurance for the city of Kent,” he said. “That was the case for the 2019 renewal as well.”

Hills negotiated the same rate for 2020 as for 2019.

“I negotiated a flat rate so there is no increase in 2020, assuming no adverse incidents between now and when we renew next year,” Hills said.

As far as the $12,000 jump in the annual premium, Hills said that is still a decent rate.

“It’s not really substantial, especially when you consider the liability,” he said.

The city made one other large worker comp payment in the last six years, a cost of $1.76 million after firefighter Ernie Rideout, 57, died in 2012 of multiple myeloma cancer, which affects the bone marrow and white blood cells. Because Rideout’s cancer was determined to have been contracted due to his profession as a firefighter, it was considered death in the line of duty, according to the Kent Fire Department. Rideout worked 32 years for the department.

The city covered $500,000 in the Rideout case. Safety National raised the annual premium about 14 percent to $50,025 in 2013 because of the $1.2 million payout it made.

“When you add up the couple of losses we’ve had, we are probably pretty even with them at this point,” Hills told the committee about the insurance hikes. “They do want to maintain a relationship with us.”

Councilman Dennis Higgins asked Hills whether the city or insurance company might get money to cover the worker comp costs from the prosecution of Garcia, who fled in his father’s pickup and is charged with second-degree murder of Moreno.

“It’s a painful subject, but there is a person in the criminal justice system to be prosecuted,” Higgins asked. “Will he be liable for the costs?”

Safety National will pursue recovery costs in the case against Garcia, Hills said.

Officer Diego Moreno. COURTESY PHOTO, Kent Police