Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

8. Leases

The Company has various non-cancelable, long-term operating leases, the largest of which are for office space including the corporate headquarters, VIP claims centers and law offices. Other operating leases consist of auto leases and various office equipment. The Company has no finance leases. Our leases have remaining lease terms of one year to ten years, some of which include options to extend the leases for up to five years.

Certain lease agreements contain renewal options and, in addition to the minimum annual rentals, generally provide for payment of a share of the real estate taxes and operating expenses in excess of a base amount. Rental expense for our office space, law offices and VIP claims centers was $4,573, $3,531 and $4,557 for the years ended December 31, 2019, 2018, and 2017, respectively. All leases expire prior to 2029. The Company expects that in the normal course of business, leases that expire will be renewed.

The Company adopted ASU 2016-02, ASU 2018-10 and ASU 2018-11 effective January 1, 2019 (“the application date”) using the required modified retrospective transition approach. In accordance with the guidance, the Company has elected not to adjust comparative periods. As such ASC 842 will be applied to each lease that had commenced as of the application date with a cumulative effect adjustment as of that date. All periods before the application date presented in the financial statements will not change and the guidance in ASC 840 will apply. The Company has elected to apply the package of practical expedients provided in ASC 842 to all leases. In addition, the Company has elected not to apply the hindsight practical expedient or the land easement practical expedient.

In calculating lease liabilities the Company uses its incremental borrowing rate as of the application date based on original lease terms. The components of lease expense were as follows:

	Year Ended December 31,
		2019
Operating lease cost	$	4,645

Other information related to leases was as follows:

	Year Ended December 31,
		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,082
Weighted average remaining lease term
Operating leases		8.42 Years
Weighted average discount rate
Operating leases		2.39%

Maturities of lease liabilities were as follows:

	Operating Leases
2020	$	4,998
2021		4,798
2022		4,270
2023		3,879
2024		3,875
Thereafter		15,405
Total lease payments		37,225
Less imputed interest		(3,227)
Total	$	33,998