Bassett's new insurance bids save Crocker nearly $9,000
By: Darrell Todd Maurina
Posted: Monday, February 9, 2009 11:13 pm
Insurance agent Ken Bassett explains how new insurance bids will save Crocker nearly $9,000.
CROCKER, Mo. (Feb. 9, 2009) — Saving $9,000 on insurance wouldn’t be a major help for most of Pulaski County’s five cities, but for the cash-strapped Crocker City Council, that’s about a third of the cash-on-hand fund balance at the end of the last fiscal year.
Insurance agent Ken Bassett told city council members at their Monday night meeting that both the city’s current insurance carrier, Savers Property and Casualty Insurance Company, and another company trying to get back into government insurance in Missouri, Continental Western, came in with similar bids. Last year’s city insurance cost $30,800 from Savers; this year, that company bid $21,970 and Continental Western bid $21,933.
Bassett told the council members that their insurance policy is due for renewal on Feb. 17. However, the two companies differ in how they handle claims arising before the effective date of the insurance, and Bassett said Crocker would have to make a one-time payment of $1,013 for “prior acts” coverage with Savers if the city changed its insurance company.
“If we were to accept Continental Western, to make sure that we don’t have a claim that happens to us that they can’t pay … they have to charge a prior acts coverage, and the statutes of the state of Missouri say we’ve got to cover back at least five years,” Bassett said.
That’s a realistic scenario. Tyce Smith, the attorney for former City Administrator Joyce Peterson, filed a lawsuit Monday against the city accusing city officials of violating the Missouri Sunshine Law by holding an illegal closed meeting last week and improperly terminating Peterson during that meeting.
Bassett said the city of Crocker will be in a better position with its new insurance coverage through either carrier.
“If we had a lawsuit that might cost $500,000 to defend it, we lose, and have to pay $2 million in damages, total $2.5 million expense, we only have $2 million coverage. This year they changed it and the defense is outside the limits, so now we have $2 million for damages and whatever the defense might have to be, which is a little broader,” Bassett said.
Alderman Kim Skaggs-Henson asked for details about employment practices liability. Bassett said the only difference between the new policy of the current carrier and the proposed coverage of the new carrier is that the proposed policy of the new carrier has a $1,000 deductible and the current carrier deductible is $5,000.
“If there is a suit, we are going to defend that as well as we can to keep from having to pay, and if there is a no judgment, there is no cost to the city. If there is a judgment, then the deductible applies,” Bassett said.
“I guess my question is, ‘Are they going to give us the same service that Savers do now?’” asked Police Chief Robert Ishmael.
Bassett said Continental Western has high ratings and should also provide good service.
“I see no reason why they wouldn’t, but I haven’t represented them. But I am certain that they will be a quality company,” Bassett said. “I would say we know where we’re at and what type of experience that we have had with Savers. I don’t suspect that the other one would be any different, and we will be writing some business with this other company, I’m sure of it, with those kind of competitive quotes.”
Bassett attributed the major price reduction by Savers Property and Casualty Insurance Company to the competitiveness of the market.
“Their reasoning for the decrease in premium was threefold: one, the city’s excellent loss experience, two, they realize we are in a very competitive insurance market right now and they knew that I was getting a price from Continental Western because I told them I was, and three, they’ve had the business for nine years and they’d like to keep it, so that’s why they dropped fairly drastically, almost $9,000,” Bassett said. “It’s your choice, and it is always very enjoyable that I can present something that is less cost than an additional cost, and I wouldn’t for any minute suspect that next year we won’t start getting caught with these 3 to 5 percent increases again.”
Mayor James Morgan urged staying the course with the current company and the aldermen unanimously agreed.
“I hate to change in the middle of the stream, so to say,” Morgan said.
However, Ishmael said Bassett had an error in his bid documents, noting that Bassett’s Continental Western insurance bid still had a Crocker city fire truck that had been donated to firefighters in Raymondville. Bassett said he’d correct the records.
Bassett said he’d conducted a review of the city’s insurance coverage with Morgan, Peterson and Public Works Director Bobby Layman, and after that review, had increased real estate and vehicle values property coverage by about $150,000 over last year. The city will now be covered for buildings and contents worth $1,893,750 and for 12 vehicles, in addition to various other types of liability coverage.