TRUMBULL COUNTY Insurance gap prompts steps to recover funds
The way the county's insurance policy is set up is 'crazy,' one commissioner says.
By PEGGY SINKOVICH
VINDICATOR TRUMBULL STAFF
WARREN -- The Trumbull County Engineer's Office will be asking county commissioners for reimbursement for money spent to repair vehicles that should have been covered under the county's insurance plan.
Money in the engineer's budget is to be used to maintain and fix county roads and bridges -- not repair vehicles that are supposed to have insurance coverage, said Rocky Riviella, controller and administrator for the engineer's department.
"We were under the impression that we had insurance coverage with either a $1,000 or $5,000 deductible -- not a $50,000 deductible, which is basically no coverage," Riviella said.
"We had to fix our tar truck, which had $15,000 worth of damage. We had to pay for that out of our budget, and that is not something I planned on," he continued.
"We weren't notified of this deductible. We never got a memo."
Riviella said that since the commissioners say they saved money by switching to this plan, he would like the county to reimburse his department for most of the $15,000.
"I don't mind paying the first $1,000 like we would have if we had a deductible, but I don't think we should have to pay it all," Riviella said. "If the county is saving money it shouldn't be at our expense."
County Commissioners Joseph Angelo and James Tsagaris say the county has saved a lot of money by switching its auto and liability coverage from an insurance program run through the Ohio County Commissioners Association to Arthur Gallagher & amp; Co. insurance.
Switched 3 years ago
The county first made the switch three years ago and continued to stay with Arthur Gallagher. It renewed the contract each year, Tsagaris said.
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.
Neither Angelo nor Tsagaris could say how much the county has saved.
"We did save a lot of money the first year and we didn't save as much the second year because we had a lot of claims, but that's how it goes," Tsagaris said. He said he didn't have exact figures.
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. He didn't know when he will receive the letter.
The decision to change insurance companies had nothing to do with Tsagaris' longtime friendship with Sam Pipino, an official with the insurance company, the commissioner said.
'No other bids'
"I've known Sammy since he was a baby but that has nothing to do it with it," Tsagaris said. "We had no other bids. No one else would give us a one-year and I wanted a one-year contract."
Denis F. Ausflug, a consultant hired by the commissioners, said the $50,000 deductible is not out of the ordinary.
"With over 260 vehicles in the fleet, carrying a ... deductible of $50,000 or higher is not unusual," Ausflug, said in a letter sent Friday to James Keating, county human resources director.
"This allows you to insure against the catastrophic loss whereby multiple vehicles could be damaged or destroyed while maintaining reasonable premium levels."
The letter also states that seven insurance carriers were approached by commissioners to submit bids, but only Gallagher returned a proposal.
"Arthur J. Gallagher & amp; Company is the fourth-largest insurance broker in North America and have a professional and positive reputation in the marketplace," the letter states. "In spite of the fact that they were the only one to propose an insurance program, I did not hesitate in recommending their program to the county."
Keating agreed with Ausflug, saying he felt the commissioners "acted with due diligence by selecting Gallagher."
Tsagaris stressed that he believes the $50,000 deductible is only if something is damaged. He said he believes if a vehicle is destroyed, it will be covered.
However, county officials said the insurance did not pay when Tsagaris's car was stolen and destroyed in September.
"The way this policy is set up is crazy, it's really insane," said Commissioner Dan Polivka, who was not on the board when the insurance contract was accepted.
Both Riviella and Polivka said they are considering purchasing supplemental policies that would allow the county to have additional insurance protection.
"I have three new trucks sitting on my lot right now that are worth $20,000 apiece and right now there is no coverage on them and that makes me uncomfortable," Riviella said.