The Steelville City Council discussed the possibility of increasing insurance coverage for both the city’s community building and City Hall at an Aug. 24 city council meeting.

This came after The Star Agency, which insures both buildings, recommended that the amount covered be increased. The City Council agreed to instruct FCNB Insurance Agency Manager Tim Lorraine, who serves as the city’s insurance broker, to seek bids from other insurance companies while the city weighs whether or not to increase insurance for both city buildings.

Currently, both buildings are insured by the St. Louis-based Star Agency. The community building insured for up to $378,043. City Hall is insured for up to $1,331,000.

Steelville Treasurer Regina Slovensky said that at a recent meeting with representatives from The Star Agency, insurance agents recommended that the city purchase increased coverage for both buildings. According to Slovensky, the agency recommended that the community building’s coverage be increased to $742,000, nearly double the current coverage. The Star Agency also recommended that coverage for City Hall be increased to $2,663,277, more than double the current coverage.

According to The Star Agency, the current insurance plans on the community building and city hall are inadequate to replace either building if they were to be irreparably damaged.

Slovensky said one reason cited for increasing the insurance on the Steelville Community Building was a $300,000 renovation to the building, which was completed last year.

Based on discussions at the council meeting, aldermen are unsure of when the last time that the insurance plans on either of the city buildings were increased.

Alderman Ward 1 Bill Bennett, the longest-serving alderman currently on the council, said, “I don’t remember us having anything but conversation on the community building, City Hall. I don’t remember anything.”

If insurance on the two buildings is increased in accordance with The Star Agency’s recommendations, it would increase the city’s premium by $9,230. The city currently pays $108,360 yearly, meaning that the city’s annual insurance bill would increase to $117,590, if the council chooses to update its insurance plan.

The city council has until the end of September, when the insurance plan is due for renewal, to decide whether or not it wants to increase coverage. The city typically renews its insurance plan every three years.

City council members discussed the possibility of finding a different insurer.

Steelville Mayor Jason Ward said that the potential $9,230 price increase “is enough to make it worthwhile for us. Not saying that we’ll get different (insurance), but still, a second opinion.”

Ward 1 Alderman Curtis Crouch agreed that it would be “pretty healthy” for the city to explore what other insurers could offer, but was doubtful that fees under a different insurance company would differ much from what the city already pays.

Crouch said, “Pretty much all the insurance companies are going to use the same formulation to get there, but I kind of argue with their figures as far as what the value is.”

The City Council is not strictly required to increase insurance coverage based on The Star Agency’s recommendation. Council members also discussed the possibility of keeping the insurance as-is.

“Or we just stay the same and pay what we’re paying,” Bennett said.

Crouch said, “I’ll tell you where that’ll lead us. Then, there’s a thing of if you under-insure, they tack a penalty onto that.”

Property insurance plans typically include coinsurance clauses that require policyholders to insure property for a certain percentage of its replacement value. Policyholders who have underinsured their property are typically subject to decreased payouts for partial damage. If the city council keeps its existing coverage, payouts for partial damage from incidents like flooding, fire, or other damage could be decreased.

Under common coinsurance clauses, and depending on the city’s agreement with The Star Agency, if the community building is insured for 50 percent of its replacement value, payouts for partial damage could cover as little as 50 percent of the cost of repairs, leaving the city to pay for the other 50 percent out of pocket.

“We do want to make sure it’s properly insured. We didn’t spend that money prettying (the community center) up just to lose it,” Ward said.

Two creeks, the Yadkin and Whittenburg, run through Steelville and make the city prone to flooding. In November 2024 the city experienced an extreme flooding event that affected more than 40 government buildings and businesses. During the flood, the municipal utilities building had at one point 30 inches of standing water inside it. In June 2015, Steelville City Hall and the adjacent police station were also damaged when the Yadkin Creek flooded.

Ward said that updating the city’s insurance plan is a balancing act between making sure that city property is protected and being good stewards of city funds.

“The city spent a lot of time and money renovating the community building. In city hall we have a lot of equipment, and the whole government is run from city hall. If anything happens, we need to make sure we can provide for all that,” Ward said. “We also need to make sure we are making wise financial decisions. We don’t have any issues with the current company, we just want to see what else is out there and do our due diligence. It’s taxpayer money.”