County officials offer explanation of why vehicles are self insured

By George Rhodes, David G. Itzen and Bill Waddle, Curry County Board of Commissioners April 13, 2011 04:00 am
The purpose of this letter is to respond to letters written to the editor (Pilot, April 2, and April 6).

The letters generally complain about the county’s practice of self-insuring automobiles in light of the recent destruction by fire to the county’s sheriff vehicle. In one of the letters a concern was expressed: “What if a county employee hits my car, or worse, a pedestrian? If the  county is broke and if it can’t afford to replace the burned sheriff’s car, how could it afford to pay damages or medical bills should an accident occur?”

In answer to these concerns, the county is self insured only for collision and comprehensive damage to its vehicles. Liability insurance is purchased through our insurance pool of City County Insurance Services (CIS). Should a county employee cause injury or damage to a third party, CIS insurance will handle the claim.

The county’s decision to self insure for collision and comprehensive was only made after careful study, consideration and consultation with the county’s agent of record, which in recent years has been CAL/OR Insurance Specialists Inc. A comparison of what would have been the actual cost of insurance premiums over the last several years compared to the  county’s actual out of pocket expenses for being self insured supports the county’s decision to self insured as being not only prudent, but wise.

The cost to insure the county’s general-fund vehicles for comp and collision would have been approximately $16,500 annually over the last several years.

This would have totaled approximately $99,000 for the six-year period from July 2004 to June 2010. There would have been a $100 deductible for comp claims, and a $500 deductible for collision claims.

Now let’s look at the county’s actual losses from comprehensive and collision claims for that same period of time. From July 2004 to June 2010, the county paid out $41,334 from this fund. This was offset by $6,351 from insurance reimbursement received, and the $18,383 interest the county was able to earn from the account balance. This means that $15,599 net was paid out after insurance reimbursement and after interest. Of the claims, many were for glass or other minor items for which little reimbursement from CIS would be available after paying the deductible.

Through the period July 1, 2004 to June 2010, the county was saved $82,401 by being self insured. In the future, we will be evaluating our position on this issue.

The board of commissioners has an open-door policy. If you have a concern regarding a county issue, please let one of us know. Thank you.