Chapter 9

LOSS OR DAMAGE TO REAL AND PERSONAL PROPERTY

This section of the Property Control Manual establishes procedures for the notification and reporting of all losses/damages to State property as required by the Office of the State Comptroller and the State Insurance and Risk Management Board (IRM). Also included are procedures for handling and reporting accidents involving State-owned vehicles and third party losses.

Authority (all property) - Pursuant to Section 4a-20 of the General Statutes, the State Insurance and Risk Management Board determines "the method by which the State shall insure itself against losses by the purchase of insurance...to obtain the broadest coverage at the most reasonable cost".

In addition, this section also provides for the proper handling of insurance recoveries as follows: "Any refund, dividend or other payment from any insurance company in connection with insurance for the State shall be returned to the Comptroller for deposit in the general fund."

Basis for Insurance Coverage

The types of coverage and amount are based upon two factors:

1. The valuation of insurance costs compared to losses; and

2. The total valuation of all real and personal property as summarized on the Asset Management/Inventory Report/GAAP Reporting Form CO-59 (Rev. 3/2006).

In order that optimum insurance coverage is provided at a minimum cost, it is imperative that:

1. All losses/damages to State property are reported promptly; and

2. Accurate property control records are maintained for operating and reporting purposes.

Types of Insurance Coverage

The State currently provides the following types of insurance protection:

1. Liability for selected exposures (Contract/condition of employment requirement or Statute).
2. Fire and extended coverage (Blanket property).
3. Automobile Fleet comprehensive and collision on selected vehicles.
4. Hull property coverage on selected vessels.
5. Boiler and machinery coverage (equipment breakdown).
6. Works of Art and Historical Treasures coverage on selected articles.
7. Statutory bonds for all state employees, Constitutional Officers and Commissioners.
8. Property coverage is provided in the following areas (subject to applicable policy limitations):
1. State-owned buildings and premises.
2. State-owned contents (including cash) in buildings both owned and leased by the State.
3. Personal property of employees, patients and inmates in the care and custody of the State (not included as primary insurance).
4. Equipment owned by other organizations (Federal Government, Leasing Companies, Student, Patient and Inmate Activity Funds, etc.) in the care and custody of the State. This is contingent upon the agreement between the State and the parties involved.
5. State-owned property located off State premises.
6. Selected motor vehicles.

Detailed information is contained in the State Insurance and Risk Management Board Manual on their website at www.irmb.state.ct.us/manual/section4.

Reporting Losses - Pursuant to Section 4-33a of the General Statutes, "Illegal, irregular and unsafe handling of state funds", the Office of the State Comptroller and the Auditors of Public Accounts must be notified immediately of all losses/damages to State property upon discovery even though they may not be covered under the current insurance programs.

The following procedures are in effect for reporting purposes depending upon the type of claim being filed:

Report of Loss or Damage to Real and Personal Property (Other than Motor Vehicles) - CO-853

Use Form CO-853 to report all losses or damages to real and personal property other than vehicles pertaining to theft, vandalism, criminal or malicious damage, lost or misplaced funds, missing property (cause unknown) or damages caused by wind, fire or lightning.

Complete all required information as outlined in Appendix B and make the proper distribution as indicated on the form. In addition to the required distribution, if the loss or damage appears to have been caused by criminal action or under mysterious circumstances, contact the Local Police Department or if applicable, local security division, i.e. campus police, capital police, etc. Please fax a copy of the CO-853 to the State Insurance & Risk Management Board at (860) 702-3424.

For missing property or property lost due to theft the item must be retired from the Core-CT Asset Management system or for non Executive Branch State agencies, the applicable asset management system. For expired, spoiled or obsolete inventory, Core-CT inventory agencies must complete an adjustment to remove the item from the Inventory module.

Report of Loss or Damage to State-Owned Automobile (Comprehensive) CO-854

Use Form CO-854 to report all losses or damages to State-owned or leased automobiles pertaining to fire, theft, vandalism, glass breakage of all types.

Complete all the required information as outlined in Appendix B and make the proper distribution as indicated on the form. In the case of theft or vandalism, however, an extra copy of the Form CO-854 should be forwarded to the Auditors of Public Accounts in order to fulfill the reporting requirements of Section 4-33a of the General Statutes. Make a notation to the Core-CT Asset Management system as applicable.

Please fax a copy of the CO-854 to the State Insurance & Risk Management Board at (860) 702-3424.

Recovery of Lost or Stolen Property If property is recovered the agency business office will return the recovered item(s) to the department that reported the loss if replacement has not been made or place the item(s) on the surplus property list for DAS/State and Federal Property Distribution Center if a replacement has been made.

Claim Procedures The State Insurance and Risk Management Board will file all insurance claim forms based upon the information submitted. If the claim pertains to EDP equipment, the State agency must submit a copy to the Director, Department of Information Technology, Resources and Facilities Planning.

An appraisal is required if the loss or damage pertains to fire, damage from malicious mischief or vandalism and/or flood damage. The State Insurance and Risk Management Board will arrange for such appraisal.

The claim forms will be submitted to the insurance adjuster and the Chief Estimator of the Public Works Department, who will make an inspection of the damage. If an inspection is not made within two weeks from the time the report has been submitted to the Insurance and Risk Management Board, the agency should notify this office in writing, making reference to the date of original notification of loss.

The agency should not contact the adjuster directly. Questions regarding claims should first be directed to State Insurance and Risk Management Board at (860) 702-3422 or (860) 702-3433 for a status.

Estimates - Certain types of losses do not require an appraisal by the insurance adjuster or the Public Works Department. Generally, the estimated dollar amount of this type of loss may be determined from the Asset Management records within the agency or by means of a vendor's replacement estimate or invoice.

If there is any question as to whether or not an appraisal is required, contact State Insurance and Risk Management Board at (860) 702-3422 or (860) 702-3433.

Settlement of Claim - When payment is received, the Comptroller will notify the respective State agency business office in writing, see form in Appendix B of this manual.

The monies will be deposited the following revenue account #44322 - Insurance Reimbursement - Other Losses.

Allotment of Recovery to Agency - State agencies may obtain the use of funds realized from an insurance settlement provided the following conditions are met:

1. The amount of the recovery is greater than five hundred dollars ($500.); and
2. The agency requires the use of the funds recovered to replace the loss.

The Allotment and Accounting Procedures - To obtain use of the amount realized from an insurance settlement, process an "Allotment Request Form”, B-107. The date of the advice of insurance claim settlement and the deposit slip number are required on Form B-107.

The special identification will be coded 18010 in all instances.

Upon receipt of an approved Form B-107, the Comptroller's Budget and Financial Analysis Division will record the allotment for special identification 18010. A record of the insurance recovery appropriation will be established on a "Control Account" basis; i.e., only one account per agency will be maintained.

Insurance recoveries must be used only for the repair or replacement of the property damaged or missing. An insurance recovery for one loss must not be combined with that of another loss. This is a restriction on the use of insurance losses that must be scrupulously observed by all concerned.

Each agency will be required to reconcile the balance in its 18010 account with the individual insurance recoveries and related expenditures. In addition, the agency must, upon completion of any insurance recovery repair or replacement project, report in writing to the Comptroller the balance of the allotment which should lapse. If there is no balance remaining, no report is required.

State-Owned Vehicles

Insurance Information - The State of Connecticut is self-insured for the first $2,000,000 for fleet automobile coverage. There is an excess liability policy with limits of $23,000,000. The State's Fleet Insurance Program coverages are as follows:

A. Fleet Liability - The first $2,000,000 of each liability claim will be the responsibility of the State Insurance and Risk Management Board under a deductible provision.

B. Collision - Collision coverage is not provided to the vast majority of State vehicles. Only vehicles of unusual nature or high value which are on record with the State Insurance and Risk Management Board prior to a loss are covered for collision. Additionally, vehicles which are contractually required to have collision coverage through lease agreements are covered for collision. Collision coverage for vehicles will be subject to a $ 2,500 deductible. The collision deductible will be the responsibility of each individual agency and will not be reimbursed by the State Insurance and Risk Management Board.

C. Comprehensive - Comprehensive material damage (physical damage other than collision) coverage is now provided on only those vehicles that have collision coverage. Upon review and analysis by the State Insurance and Risk Management Board, it was decided to provide comprehensive coverage on only those vehicles that are leased, are of unusual nature or high value. Damage to vehicles with no comprehensive coverage will be the responsibility of each individual agency. Those vehicles which still have comprehensive material damage coverage will be subject to a $2,500 deductible and the deductible will be the responsibility of the agency.

Reporting Accidents - Report all automobile accidents resulting in personal injury or substantial other property damage immediately to the Fleet Insurance Administrator at 1-800-327-3636, including those accidents that occur after business hours. Minor accidents involving no personal injury may be reported on the next regular business day by mail.

Claims Procedures - The following procedures are in effect for reporting purposes:

1. Complete Form MVCU-1 (Accident Report State-Owned Motor Vehicles) and Form CO-854 (Report of Loss or Damage to State-owned Automobile). See Appendix B for the forms.

2. The agency will distribute the four typewritten copies as follows:

Losses Caused by Third Parties

Accidents - All third-party losses must be reported immediately to the agency head. When damages to an injured employee and State vehicle are due to the negligence of an outside individual, it should be recovered from the individual or his representative.

For Example: A State employee, driving a State vehicle, is in an automobile accident caused by a third party.

Procedure - The usual accident or loss report must be filed with the Office of the State Comptroller, the State Insurance and Risk Management Board and also with the Fleet Insurance Administrator if the accident involved a State motor vehicle.

The data reported to the State Insurance and Risk Management Board should include additional information on the liable third party.

If the dollar amount of the loss/damage cannot be readily determined, the agency is responsible for obtaining an appraisal. The services of the Chief Estimator for the Public Works Department may be obtained.

Claim Handling - A claim should also be filed by the State agency against the liable third party. Any assistance, which may be required, will be provided by the Office of the Attorney General in the handling of the claim.

Settlement of Claim - In those instances where the loss is not paid by the State's insurer, the agency will either receive payment directly from the liable third party or settlement will be made with the Office of the Attorney General if that office acted on behalf of the agency initiating the loss.

Third-Party Recoveries - Upon recovery, the method of handling the payment received will depend upon the method the agency used to budget for third-party recoveries:

1. If the total cost for the repair or replacement of a loss is a part of the agency's normal operational budget, then all third-party recoveries are to be deposited to Miscellaneous Income-Revenue Account # 44151.

2. If the total cost for the repair or replacement of the loss is not part of the agency's normal operational budget, then all third-party recoveries are to be deposited as either current or prior year refunds #44420 (current) or #44410 (prior years) in accordance with the rules for such deposits as outlined in the State Accounting Manual.

Return to Table of Contents
Return to Index of Comptroller's Manuals
Return to Comptroller's Home Page