Like many large-city governments, Boston is self-insured — that is, instead of paying for an insurance policy to cover its claims, it takes the risk of paying everything it gets hit with out of the city coffers. Hence, the “Oops” fund. If, for instance, you win a $500 claim against the city for damage to your car, your check will come not from some insurance company but directly from the City of Boston; the same is true for the $5 million payment to the family of Victoria Snelgrove. This way, the city cuts out middleman costs, and also has incentive to make sure its employees don’t screw up.
Given the extremes of weather, the narrow roads, and the aging infrastructure, Boston inevitably faces a large number of personal-injury and property-damage claims. But even factoring that in, direct comparisons with other cities are difficult, because cities budget so differently and, in any case, the information is hard to come by. Some cities, for instance, include provisions for worker-compensation claims in their “Oops” funds, while Boston keeps those separate.
San Francisco is similarly self-insured, and spends about $20 million a year on claims and judgments, or roughly 0.3 percent of its $6.5 billion annual city budget.
Most other large, self-insured cities are in the same ballpark of 0.3 percent of total budget, including Milwaukee, Omaha, Sacramento, Oakland, Denver, and Austin. Philadelphia and New York City — with much bigger police forces — spend more: around one percent of the total city budget.
If Boston held close to its $3.5 million budget, it would be below the 0.3 percentage. But instead, it has been spending much more, putting it around 0.7 percent over the three fiscal years between 2003 and 2005 — and rising.
