To insure or self-insure Muni
The SFMTA purchased insurance at the cost of $2.4M, which covers claims from $5M to $25M. The policy went into effect July 1, which means that the July 18th crash between two Muni LRVs at West Portal Station, which injured over 40 people, maybe covered. So far, the only claim that has come forward is a $193 claim from a passenger who had some personal belongings damaged, plus her medical costs from hitting her head.
The largest Muni payout was in 2003, where a Muni maintenance truck jumped the curb and crushed a little girl to death. That payout was $5M, which would have just have been within range of Muni’s new insurance policy.
Setting: Courtroom. Two MTA representatives are whispering to eachother in a last minute debate about insurance before telling the judge what they plan to do in light of the political and budgetary catastrophe MUNI is in.
MTA rep #1: (whispering) “the focus group said people want us to pay for insurance”
MTA rep #2: (whispering) “but most of our payouts would still be below the threshold covered by insurance!”
MTA rep #1: (whispering) “yes, but it would make us look better politically and fiscally, it sounds responsible”
MTA rep #2: (whispering) “but what about the really BIG payouts over $5M? we’re still going to have to pay for that!”
MTA rep #1: (whispering) “yes, but the public will only be mad the insurance company because the coverage wasn’t higher”
Judge: “Will you please state your plan so we can move on?”
MTA rep #1: (rising) “Yes your honor, we both concur that in light of budgetary constraints placed on our city and our department, self insurance is no longer an option. To show respect for MUNI riders and city tax payers and to prove that belt tightening doesn’t have to compromise service, we shall contract with a 3rd party insurer effective immediately”
MTA rep #2: (whispering) “You forgot to say it’s going to cost us $10M to get $6M worth of payouts over the next 5 years”
MTA rep #1: (whispering) “Shut up or you’ll upset the public”
Scene: Walking towards a Starbucks. The two MTA representatives continue their discussion after leaving the courtroom.
MTA rep #2: “When the public does the math, they’re going to be mad”
MTA rep #1: (holding door open for rep #1) “The public doing the math in THIS town means using their iPhone calculator just to have an excuse to show it off” (door closes, fade to black)