Both insurance brokers stumping for Sunbury’s 2016 property and casualty insurance contract attended a Feb. 17 Village Council meeting to clarify their bids.
Representing Burnham & Flower Insurance Group and selling a Huntington Insurance Public Entities Pool of Ohio (PEP) product were Tom Walsh and Kirk Orton.
Representing Reinhart, Walters & Danner, the village’s current property and casualty brokerage firm, were Gary Walters and Sharon Doughty, marketing the Ohio Plan.
Both firms attended the Feb. 3 council meeting, but council members asked them to return with additional information about their coverage.
The Ohio Plan comes in a bit over $1,000 more than the PEP Plan, but there were questions about coverage if the village leaves the PEP Plan; coverage of claims, even if the occurrence happened while the village was in the PEP plan, would not be honored.
Under the Ohio Plan, coverage is written on the occurrence; the village could leave the plan, but claims for occurrences while the village was in the plan would be honored.
“The big difference with us is the coverage happens when the occurrence happens,” Doughty said. “That’s our duty — to take care of that for you. If you leave them, even if the occurrence happened before you left them, they will not pay that claim.”
Walters also said that was a fundamental difference between the PEP Plan and the Ohio Plan.
“With the Ohio Plan, you own the coverage with us; with PEP you rent the coverage,” Walters said. “If you think about what insurance is, it’s built on one principle — it agrees to pay the claim on the occurrence. That’s the fundamental premise of insurance. That’s the difference between an occurrence form versus a claims paid form.”
Council member Dave Miller said he would be cautious about the PEP Plan.
“It’s very hard for me to accept if we’re insured during the occurrence and then we would leave the PEP Plan, that occurrence would not be covered,” Miller said.
Sunbury’s current base limits are $6 million per occurrence with a $9 million aggregate, and $3 million umbrella coverage for $9 million per occurrence and $11 million aggregate. Doughty said she has never seen an Ohio Plan claim exceed $3 million.
The PEP Plan offers $6 million in coverage per occurrence with no aggregate, and a three-year rate guarantee if the village’s loss ratio remains under 60 percent.
While the village’s current Ohio Plan coverage was due to expire on March 1, council members wanted additional time to examine both insurance plans.
Council members approved a motion to continue with Ohio Plan coverage until the next finance committee meeting, paying a monthly fee pro-rated on the new rate.