Insurance switch results in big savings

By FREDA R. SAVANA

The Intelligencer





Warrington Township will save more than $200,000 this year, said Supervisor Carol Butterworth, by switching insurance carriers that provide the municipality with liability coverage for its property, employees and officials.



Butterworth, herself an insurance broker, said the township will spend about $210,000 rather than the $440,000 it spent in 2004 for comparable coverage.



The township left the Delaware Valley Insurance Trust, a Hatboro-based company, for Selective Insurance Co., with a broker, Brown and Brown, in the Lehigh Valley. However, it will continue in the trust for its workers' compensation and health insurance coverage.



Butterworth said she began looking into the township's insurance coverage after the township settled a lawsuit with United Artists in 2003. Due to a confidentiality clause in the settlement, the details were not disclosed. The township did not make a cash settlement but came to terms on future development at the site where the theater wanted to build.



"Our premium went up and our deductible went up," said the supervisor. DVIT raised the deductible from $10,000 in 2004 to $25,000 in 2005, Butterworth said. Under the new policy, the deductible is $5,000.



A representative of DVIT declined to comment on Warrington's insurance matters.



The insurance covers a range of liability matters for Warrington, including general, property and auto liability, as well as employee dishonesty and suits against public officials.



Both Butterworth and Supervisor Glenn McKay said they were concerned the trust, known as a self-insured organization, is not regulated by the state's Insurance Department.



With Brown and Brown, which is regulated by the state, Butterworth said, "we'll have a third party looking over our shoulder, which makes me feel good." With a regulated agency, there is also an appeal process, something a self-insured group does not have, the supervisor added.



McKay said he thought DVIT, a coalition of municipalities who share insurance coverage under what's known as an umbrella policy, should have absorbed the cost of Warrington's settlement with the theater chain.



"But it looks like when you make a claim the premium jumped significantly in my opinion. The claim was not equally shared by the coalition."



This year's budget, Butterworth said, allotted $504,681 for its annual premium with DVIT. She said she wants to be sure the savings that result from the switch in companies is untouched.



"We've got our insurance paid for next year, if we don't have any claims."