ITEM NO: 7b_Supp 
DATE OF 
MEETING:__6//28/2011______ 










Presented 6/28/2011 
Jeff Hollingsworth, Risk Manager

Outline 
Property Insurance Program Recap 
Structure of Property Insurance 
Property Insurance Cost Factors 
Insurance for Capital Projects 
Property Insurance Challenges 
Renewal Projection for July 1, 2011 


2

Current Structure of Property Program 
(Major Deductibles Per Occurrence) 
$500,000 Million Fire and Extended Coverage 
$500,000 Million Flood
$50,000 Course of Construction
$25,000 Fine Arts 
$100,000 Equipment Breakdown 


3

Current Structure of Property Program 
(Main Limits Insured Per Occurrence Unless Noted) 
$1 Billion Fire/Extended Coverage Limit;
$25 Million Flood Limit (Annual) 
$50Million Course of Construction Limit 
$350 Million Terrorism 
$100 Million Equipment Breakdown 
$100 Million Business Interruption 


4

Current Structure of Property Program 
First $25 Million with Lexington (Chartis) 
Excess coverage with various Lloyds Syndicates 
A+++ Rating 
Procured by Alliant Insurance 



5

Property Insurance Cost Re-Cap 
2011 Estimate 
$5,000,000

$4,500,000
Property Insurance Premium
Property Value x $1000
$4,000,000

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$-
2000    2001    2002    2003    2004    2005    2006    2007    2008    2009    2010   2011 Est

6

Property Insurance Coverage 
Annual Policy  July 1st through June 30th 

Fire and Extended Coverage 
Wind, Spills, Collapse, Impact, and Explosion 
Covers Equipment Breakdown 
Mechanical/Electrical Equipment 
Covers Owned, Leased, Rented Property 
Example  Applied to leased generators 
Covers Business Interruption 
If Due to a Loss Covered by the Policy 


7

Property Insurance Coverage 
Annual Policy  July 1st through June 30th 
Covers Flood 
Excludes Land Movement/Earthquake 
Covers Terrorism 
Covers Projects Under Construction 
* All subject to exclusions either by peril,
location, or type of property 


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Property Insurance Cost Factors 
Rates depend on: 
Total Insurable Values Reported: 
Appraisals (Done 2010 and 2011) 
Values of Projects Under Construction 
Loss Record 
Primary and Reinsurance Markets 
Underwriting of Locations (Port Portfolio) 
Cost of Major Materials 
Catastrophic Exposure (Wind, Earthquake, Flood ) 

9

Aviation Property Losses 
Total Property Damage-               Collections 
2005 Losses = $140,000                Recovery = $104,000 
2006 Losses = $280,000                Recovery = $115,000 
2007 Losses = $94,000                 Recovery = $87,000 
2008 Losses = $113,000                Recovery = $96,000 
2009 Losses = $34,000                Recovery = $18,000 
2010 Losses = $72,000                 Recovery = $45,000 
2011 Losses = 12,000                  Recovery = $11,000 
Collection Recovery ~ 64% 

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Non-Aviation Property Losses 
Total Property Damage          Collections 
2005 Losses = $9,000           Recovery = $3,500 
2006 Losses = $61,000           Recovery = $45,000 
2007 Losses = $42,000           Recovery = $26,000 
2008 Losses = $67,000           Recovery = $33,000 
2009 Losses < $1,000
2010 Losses < $2,000
2011 Losses  None Year To Date 
Collection Recovery ~ 60% 
Excludes T-86 Spout Losses in 2006 and 2007 
11

Insurance for Capital Projects
Insurance Provided : 
Coverage For Projects less than $50 Million in Value 
Aviation Capital Current Values ~ $ 88 Million* 
Non-Aviation Capital Costs ~ $24 Million * * 
Deductible of $50,000 
Includes interests of contractors 
Rental Car Facility*** 
Port has a separate policy for this project 
Insured to $280 Million including earthquake 
East Marginal Grade Separation Project 
Port has a separate policy for this project 
Insured to $20 Million including earthquake 
* Excludes Rental Car Facility 
** Excludes East Marginal Way Grade Separation 
***Will be on Port's main property insurance schedule upon completion 


12

Earthquake Insurance Challenges 
Low limits compared to values at risk 
Past loss history with Nisqually in 2001 
Less capacity due to 2010-2011 events 
New modeling used by insurers 
Port has high insurable values 
Port has aggregation of values 
Insurers with aggregation of values 
Port is not having coverage quoted. 
13

Property Renewal Forecast 
July 1, 2011 
Port has budgeted $1.35 Million for renewal  
Final proposal will depend on: 
Final rate offered to Port per $100 of insured value; 
Final property values used for renewal to include 2010
appraisals 
Final estimation of capital projects for 2011-2012; 
Will increase due to Rental Car Facility 
Renewal range estimated to be between $1.3
Million to $1.4 Million; 
If no major changes to program structure
(deductibles/coverage) 
No purchase of earthquake coverage/FEMA still a source of
funds 

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