City of Cassville drops old insurer for Willis

Wednesday, May 20, 2015

Aldermen select higher bid, cite past issues with former company

After being with Connell Insurance and Midwest Public Risk for the past three years, the city of Cassville has reverted back to the company that insured it for 30 years prior -- Willis Insurance in Cassville.

The city will switch carriers on July 1 for its property, liability and workers compensation insurance after selecting a bid by Willis Insurance, at a cost of $121,625 per year, even though the local office's bid was the highest of the three bids submitted.

"We have better sales tax revenues this year, so we have that, and we'll have to do a budget adjustment in mid-year," said Bill Shiveley, Cassville mayor. "With Willis being in town, they have to live with us and we have to live with them, so they will be more apt to do some things."

In making the decision to go with the Willis bid, aldermen and Steve Walensky, public works director, cited past issues with claim payments made by Midwest Public Risk, specifically when lightning brushed the city's Well No. 4 near Walmart in April 2014, causing $24,600 in damages.

Walensky said after making the claim, Midwest Public Risk moved to a settlement option instead of a payout, saying the city could not prove it was lightning that caused the damage.

"They paid half of the claim, and that hurt the department, because we had to cancel other projects to free up money to pay for the well," he said. "We used the experts to make the claim, went through the process and did everything we should have done, but they still denied the full claim."

Midwest Public Risk paid the city $11,050, which is half of the total cost, less a $2,500 deductible. In total, the city spent $24,600 for damages directly caused by the lightning strike, plus another $10,890 for other repairs needed at the well.

The city's distribution maintenance budget had a reserve of $16,643 to put toward the project, but, even with the insurance money and the reserve funds, the city was still $7,797 short for the repairs, so Walensky said the city decided to drop an emergency wiring project from the capital improvements list, freeing up $10,000 from the capital improvements budgets to cover the total cost.

Alderman Jon Horner said the city should take unpaid claims into consideration when choosing a bid, as those lead to more cost for the city.

"Claims not getting paid are essentially premiums," he said.

Alderwoman Cindy Carr said the fact that Willis is a local company should play a role in the decision to award the bid.

"We are happy to have the business back in the agency, and in our community, said Annette Henderson, with Willis Insurance.

Henderson told aldermen although the cost of the insurance is higher, claims are paid at a high percentage and the company looks more for ways to pay a claim than to deny it.

The city has $40,000 budgeted for its property and liability insurance, and another $40,000 for its workers compensation insurance. Shiveley said with increased revenue into the city, handling the cost will not be an issue.

Also, because the plan runs from July 1 to July 1, 2016, the city is only paying half of the premium this year, then will be able to budget again when January 2016 comes.

There were three bids submitted to the city. Hollister-based Connell Insurance, on behalf of Midwest Public Risk, bid $83,799.42; Missouri Intergovernmental Risk Management Association, based in Columbia, bid $84,438; and Willis Insurance in Cassville bid $124,508 for a plan with lower deductibles, and $121,625 for a plan with high deductibles.

Shiveley said the Missouri Intergovernmental Risk Management Association bid was not selected because it was an all or nothing bid.

"I also don't know a lot about them and, quite honestly, couldn't find anyone that knew much about them or their history," he said.

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