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Cost for Addison's liability insurance keeps going down

February 13, 2013 - Addison Township is now saving big bucks on its liability insurance thanks to a willingness to seek competitive bids and a lack of trips to court.

Supervisor Bruce Pearson was pleased to report the township received a $40,886 rebate from its insurance provider, the Livonia-based Michigan Municipal Risk Management Authority (MMRMA).

"This is the biggest one," he said. "Last year, it was almost $20,000."

A $40,886 rebate is particularly significant when compared to how much the township is paying for insurance.

Insuring the township will cost $47,091 this year. Last year, it cost $45,393, but the township also received a rebate of $18,891 for the previous year.

At one point, Addison's liability insurance was costing the township more than $77,000.

Pearson attributed these cost reductions to two things.

One factor is Pearson's willingness to look for a better deal.

"I opened it up to all the insurance companies and said, 'Hey, give me some bids,' then boom, we got some dramatic drops (in premiums from MMRMA)," he explained.

The township board followed suit and helped put pressure on MMRMA when it voted in February 2012 to approve a contract with another insurance provider. Lo and behold, MMRMA came back with a better deal and the board approved a two-year contract with them the following month.

"As soon as our insurance company found out we were looking to (sign with) another insurance company, all of the sudden all kinds of things happened," Pearson said.

Pearson doesn't believe he did anything extraordinary; he just did his job.

"That's what (the residents) pay me for – they pay me to go out and negotiate on behalf of them, so we get the best rate," he said. "If you do nothing, sit on your hands and tell everybody everything's running perfectly, well, you're missing all the good opportunities to negotiate.

"That's why I'm always putting stuff out to bid. If you don't ask, you don't get . . . Insurance companies don't automatically tell you they're going to drop your rates. You have to push them. You have to let them know you're serious about switching companies if you don't get what you want."

The other factor is the township is no longer engaged in so many lawsuits.

Under the previous administration, Addison took part in numerous legal battles, ranging from rezoning issues to Freedom of Information Act requests.

"(The former supervisor) never settled problems in the township," Pearson said. "He just let everybody go to court."

Pearson indicated that under his administration, he's more willing to settle issues directly rather than go to court.

"I pick and choose which (issues) are important enough to go to court on," he said. "Generally, I can solve most of the problems in the township when people come here.

"There's a few, of course, that we can't, but we're not losing lawsuits. Just about everything that we've had to take to court, we've won."

Pearson gives a lot of credit to township attorney Bob Davis for doing such a great job.

So, what's going to happen to that $40,886 rebate?

"We're putting it in the bank," Pearson said.

And that's not the only savings.

Based on the latest audit, as of the close of the current fiscal year, Addison's governmental funds reported an increase of $235,829 in comparison with the prior year, according to township Clerk Pauline Bennett.

"And yet we've done more as far as improving the township than has ever been done," Pearson noted. "We've had an aggressive program (concerning) roads, infrastructure, parks. We've done more and yet we've cut our expenses tremendously."

"We don't have to raise taxes and we can work within our budget (during) the worst economic times," Pearson added.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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