Local Government Ins Trust

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What is LGIT? Since 1987, many local government entities in the State of Maryland have covered their primary and excess liability, auto, environmental, property, boiler & machinery through the Local Government Insurance Trust (LGIT). LGIT was founded by the Maryland Association of Counties (MACo) and the Maryland Municipal League (MML) in answer to difficulties towns, cities and counties then faced in securing affordable insurance.LGIT is a non-profit association authorized by state law, wholly-owned and managed by its local government members. The Trust’s main purpose is to provide joint self-insurance programs or "pools" for towns, cities and counties in the State of Maryland. The concept is simple: rather than paying premiums to buy insurance from an insurance company, local governments contribute those premiums into a jointly-owned fund. The money in that fund is used to pay for the members’ claims, losses, and expenses. Below are answers to frequently raised questions about LGIT.The private insurance market runs in "hard" and "soft" cycles. During a soft cycle, insurance is relatively cheap and easy to acquire. During a hard cycle, insurance is very expensive and hard to obtain because insurance companies tend to view local government losses as risks that are undesirable or unpredictable. In the hard cycle of the late 1980s, a majority of Maryland towns, cities and counties suffered from the high cost of insurance premiums and loss of insurance coverage. Because of the existence of LGIT, Maryland local governments know they now have coverage available to them at stable rates and predictable costs — regardless of private insurance industry cycles.

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