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JWA insurance costs jump more than 60%

April 04, 2002

Paul Clinton

JOHN WAYNE AIRPORT -- The annual cost of insuring the airport

increased more than 60% this week, the county's insurance manager said

Wednesday.

More than 30 separate tiers of coverage went into effect at the

airport Monday, when the previous coverage expired, said Risk Assessment

Manager Sharon Lightholder. The increase was at the low end of county

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projections.

"Some of the earlier projections put it at anywhere from 60% to 80%

higher," Lightholder said. "It's been a very safe airport. We haven't had

a lot of claims against it."

The county holds two basic types of coverage on the airport: one for

property damage, the other for personal injury claims.

The airport's most comprehensive policies cover the county in the

event of damage to or loss of property. The county will extend more than

two dozen policies amounting to $250 million in coverage.

The county holds a "sub-limit policy" of $125 million in protection in

the event of an earthquake or flood.

The cost of insuring the airport itself jumped 61.5% when compared

with last year. The new coverage will cost the county $1.77 million.

The county also holds $200 million in two policies protecting it

against lawsuits stemming from bodily injuries. That coverage spiked

66.5%, jumping to $452,646.

The Sept. 11 terrorist attacks sparked the huge insurance increases at

the airport.

To help smooth out the dent the costs will make in the budget, airport

managers proposed increases to the parking rates at the airport.

On March 12, the Orange County Board of Supervisors approved a 55%

cost increase to park in the lots at the Thomas F. Riley Terminal and a

71% increase to park at an off-airport lot.

"The [new insurance] costs are high, but it's just the reality of life

after 9/11," airport spokeswoman Ann McCarley said. "The adoption of

those rate increases will help to ensure the continued, safe operation of

the airport."

Before Sept. 11, the airport also held coverage against war or

terrorism. The insurance providers, after the attacks, canceled those

policies at all airports.

As part of the new policies, the airport has secured coverage in the

event of war. However, Lightholder is still investigating whether to

pursue coverage for terrorist acts.

That policy has skyrocketed and can be bought for about $100,000,

which Lightholder said would be too expensive at this point.

The increased insurance costs were factored into the estimate, by

airport managers, that it would cost an additional $9 million to operate

the airport during the year following Sept. 11.

It's not surprising who will shoulder the brunt of that spike,

Lightholder said.

"It's going to translate to higher costs to the traveling public," she

said.

* Paul Clinton covers the environment, John Wayne Airport and

politics. He may be reached at (949) 764-4330 or by e-mail ato7

paul.clinton@latimes.comf7 .

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