How the Mat-Su Borough Literally Protects Itself

When you buy car insurance, you pay a company every month to cover your liability in the event of an accident. If you crash your car, the insurance company pays to fix it. Simple, right? But what happens when a borough vehicle gets in an accident, or someone gets hurt at a borough park? You might be surprised to learn that the Mat-Su Borough manages insurance differently.

The Mat-Su Borough is self-insured, which means it does not buy traditional insurance from a private company. Instead, the borough sets aside money each year in a special fund to pay for accidents, injuries, and damage claims. Think of it like having a savings account for emergencies instead of paying someone else to cover those emergencies. When someone files a claim against the borough, the money comes directly from this fund rather than from an insurance company.

Traditional insurance works differently. When a business or person buys regular insurance, they pay monthly or yearly premiums to an insurance company. The insurance company collects premiums from thousands of customers, and when one of them has a claim, the company pays it. The insurance company takes on the risk and, hopefully, makes a profit. With self-insurance, the borough keeps that money and takes on its own risk.

So why would the Mat-Su Borough choose to self-insure? The main reason is cost. Insurance companies need to make a profit, pay their employees, and cover their own expenses. When you add all that up, insurance can be expensive. Large organizations like our borough often find that over many years, they save money by paying claims directly instead of paying insurance premiums. The borough still hires professionals to manage claims and prevent accidents, but these costs are less than traditional insurance premiums would be.

How do governments decide whether to self-insure or buy traditional insurance? Leaders consider how much money the borough has available, how many claims happen each year, and what those claims typically cost. They also think about their comfort level with risk. Some smaller municipalities buy traditional insurance because they cannot afford one large, unexpected claim. Larger entities like the Mat-Su Borough have enough resources to handle most claims without going broke.

Even self-insured governments usually carry what is called excess or umbrella insurance. This is like a safety net above the safety net. A municipality might self-insure for claims up to a certain amount, maybe the first million dollars. But if a really catastrophic accident happens, and the claim is much larger, the umbrella insurance kicks in to cover the extra cost. This protects the agency from financial disaster while still saving money on everyday claims.

If you want to learn more about how the Mat-Su Borough manages insurance and liability, start with the borough website at matsugov.us. You can also call the borough administration office at 907-861-7801 to ask specific questions. Borough assembly meetings are another great resource, especially when they discuss the annual budget, which includes funding for the self-insurance program. And you’re just in time to attend, because the budget process is about to start.

If you’re curious about one of the cities, you can give their respective City Hall a call and ask away. Understanding how your local government handles insurance might not seem exciting, but it affects the taxes you pay. Good risk management means more money available for roads, parks, and services you actually use.