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Stewart County board accepts Tennessee Risk Management insurance contract over lower-bid insurer
Summary
The Stewart County School Board voted to approve a contract with Tennessee Risk Management after members said the company offered substantially lower deductibles and faster claims service, despite a higher annual premium than a competing bidder.
The Stewart County School Board voted to accept an insurance contract with Tennessee Risk Management after members said the company’s lower deductibles and rapid claims handling outweighed a lower-priced competing bid.
Board members approved the contract on a roll-call vote after a motion by Miss Fitzhugh and a second by Mister Salk. During the discussion, officials contrasted an apparent low-cost bid of about $414,000 with Tennessee Risk Management’s higher premium, around $480,000, and focused on differences in deductible structures.
Board members and staff said the lower-priced bidder used percentage-based deductibles tied to the total value of a building, which could produce very large out-of-pocket costs in the event of major damage. The board cited an example from the transcript in which a 1% deductible on a building valued at $18,000,403 would amount to about $184,000. By contrast, Tennessee Risk Management offered fixed deductibles in some cases as low as $500, board members said.
“They’ve always done what they said they would do, and they give us a break,” Eric Watkins said of Tennessee Risk Management, describing recent claims handling. “We had a check within a week” after an incident in Cumberland City, he added, and said the company had promptly addressed a bus totaled by a fallen tree.
Board members also emphasized customer service and litigation support as reasons to remain with Tennessee Risk Management. One board member cited past experiences in which systems that switched to public risk insurers later returned to Tennessee Risk Management.
Action details: Motion to accept the Tennessee Risk Management bid by Miss Fitzhugh; second by Mister Salk. The board then took a roll-call vote. Named votes in the record include Mister Gillum (yes), Mister Shelton (yes) and Mister Davis (yes); other board members verbally responded in the affirmative during the roll call. The motion carried and the contract was approved.
The board’s discussion did not adopt any changes to coverage limits or deductibles at the meeting; the vote approved the contract as presented. Members said the decision reflected concern that percentage-based deductibles on older school buildings could produce outsized repair costs after storms or other disasters.
The meeting then moved on to the director’s report and other agenda items.
