Every year we see commercial insurance companies come to Tennessee with an appetite for new business in the form of public entities, particularly schools and municipalities. Usually, the enticement is lower premiums. Although the premium may present lower in year one, for-profit insurance companies cannot compete longer than one or two years on price when competing against a not-for-profit pool. In addition, gaps in coverage specific to Tennessee’s municipalities and schools are all too common.
The Tennessee Risk Management Trust Pool offers a stable risk environment at a stable cost year after year. The coverage is designed only for Tennessee’s political subdivisions. In cooperation with the program managers at NGU Risk Management, we’ve continuously refined and broadened your coverage over our nearly 30 years while providing stable and predictable premiums to the membership.
When members seek insurance bids, those members are essentially bidding against themselves and the rest of the membership. A bid situation can cause a ripple effect of less than predicable stability and can affect the membership as a whole by lessening the collective bargaining power when negotiating excess insurance and other contracts. The short term financial gain obtained by selecting a cheaper product could cost that member more over time.
If your entity chooses to seek alternate insurance bids, be sure to compare more than just the price. Other very important considerations are coverages, deductibles, carrier ratings, customer satisfaction during the claims process, litigation defense experience in Tennessee, and the level of expertise in matters of Tennessee’s public entities. The competition is not competitive at all when considering the whole.