TRUMBULL COUNTY INSURANCE Records show claim rebilling, fees
Two commissioners stand by their plan.
By STEPHEN SIFF
VINDICATOR TRUMBULL STAFF
WARREN -- When a Trumbull County-issued car was stolen from the driveway of Commissioner James G. Tsagaris in 2003 and discovered torched less than 24 hours later, the county filed an insurance claim.
The claim wasn't filed for the vehicle, a 2-year-old Chevrolet, which wasn't worth enough to be covered under the county's policy. The county just filed a $500 claim to pay the towing company that recovered the car.
Insurance paid the towing company, then billed the full amount of the tow back to the county. And another fee for adjusting a claim was tacked to the county's bottom line.
In the three years since Trumbull County switched its auto and liability coverage to Arthur Gallagher & amp; Co. insurance, it has racked up about $70,000 in fees. In all but a few cases, the insurance company paid the claim, then billed back all the expenses to the county.
County commissioners Joseph Angelo and James Tsagaris say the county has saved a lot of money by switching from an insurance program run through the Ohio County Commissioner's Association to Gallagher in 2003.
Waiting for explanation
Angelo, who recently became licensed in Ohio to sell commercial insurance, said he is waiting for a letter from Gallagher that will explain how much money was saved.
"All that I know is the county is paying a lot less," Angelo said. "We get good rates, we are well covered."
Three years ago, Trumbull County switched from a policy that would cover claims greater than $5,000 to one that won't pay on anything less than $50,000. The switch was supposed to save commissioners $18,000 a year on what had been a $361,000 policy.
"What they proposed to us was a much better plan," Tsagaris said. He said it was better because it saved money, but wouldn't get into the details.
The Trumbull County Independent Insurance Agents Association, however, disagrees after doing its own review.
Fees on the new policy seem to have eaten away at the savings potential, the association found, and the new policy doesn't touch legal fees which the old policy had covered.
"It is troubling," said Bill Shapiro, president of the Trumbull County Independent Insurance Agents Association, which for years had evaluated insurance contracts for the county. The group had also served as the county's local agent, until the switch to Gallagher.
What records show
The Vindicator also looked last week at what records were available, and found it is difficult to separate fees from other payments to the insurance company. Fees are not invoiced separately and county employees do not appear to keep a file.
The information is not available directly from the insurance company because of confidentiality rules, said James G. Howell, senior are vice president of the Gallagher office in Cleveland.
The analysis by the Trumbull County Independent Insurance Agents Association found that the county paid $27,000 in fees to Gallagher in 2001 and $24,000 in 2002. That's about $8,000 more than the company projected for 2001 and $14,000 more than projected for 2002.
The association was not able to complete an analysis for 2003, but at the start of the policy term the company estimated fees of $25,000.
Legal costs not covered by the county amounted to $72,000 over the three years, the association said.
During that time period, the company has processed at least 102 claims, based on the number of invoices billed back to the county.
But an examination of records by The Vindicator and discussions with county officials could only locate one case in which the company actually covered part of a claim, although Howell said there are others he cannot discuss because of confidentiality rules.
The one payment on a claim that could be located came in February, in the form of a check for $138,000 -- of which the county will be asked to repay $50,000 --for flood damages at the county 9-1-1 center and a sanitary sewer plant in Brookfield last year.
County officials say damage at the 911 center alone was $1.5 million and plan to seek more money through arbitration.