Starkville hopes to reduce auto insurance claims


Lynn Spruill

Lynn Spruill


David Little

David Little



Tess Vrbin



Starkville officials say city employees must take steps to avoid accidents and fender-benders with city owned vehicles after Liberty Mutual dropped the city as a property, vehicle and equipment policyholder due to the number of claims.


Liberty Mutual paid $611,395.52 in claims from Starkville between Jan. 1, 2017 and Feb. 12, 2020, according to data City Clerk Lesa Hardin provided The Dispatch in response to a public records request. Company representatives sent the city a notice of non-renewal on May 1, and coverage expires June 30.


The board of aldermen voted unanimously on May 19 to accept Travelers as its new provider. The city removed all vehicles worth less than $5,000 from the city's compensation plan and increased its deductibles on vehicles and equipment, Ward 3 Alderman David Little said.



The Travelers plan still costs $18,000 more than the previous plan with Liberty Mutual, with an annual premium of $110,147.


Reducing the city's loss ratio, or the number of payments for losses compared to the amount of premiums taken in, "will make us more attractive down the road when we're trying to find future insurance carriers," said Little, an insurance claims manager for Mississippi Farm Bureau Casualty Insurance.


The city had very few claims for buildings over the past few years, and Liberty Mutual was willing to continue insuring city property, Little said, but Travelers approached the city with a "package deal" that would cover both auto and property claims.


The major vehicle mishaps in the past few years included two fire truck collisions while responding to calls, a hit-and-run involving a community development vehicle, a garbage truck turning over in a ditch in 2019 after a car ran it off the road and another garbage truck catching fire and spreading to other garbage trucks while they were parked in a city lot.


While those were the most serious incidents, Mayor Lynn Spruill told The Dispatch that the police department might have accrued the most claims through less serious auto accidents. She also said 2019 was a particularly rough year for vehicles in the sanitation department.


"We had three trucks that we lost -- two that were totaled in a fire and one that was damaged -- and we had (another) one that fell off a tow truck," Spruill told The Dispatch. "It was just one of those odd years."


Both Little and Mayor Lynn Spruill said they had not realized until recently that every single incident - no matter the amount of damage ­-- was being submitted as a claim to Liberty Mutual as well as to the Mississippi Municipal League.


The city sends claims to MML in case someone claims to have "residual health care issues," such as whiplash, as a result of an accident, Spruill said at last week's board meeting. However, claims involving smaller accidents like fender-benders were never meant to be submitted to insurance companies.


Spruill and Little said there was likely a clerical error.


"I think the people submitting those claims for us misunderstood (and thought) that it would be all of it submitted, as opposed to those things that fell under our deductible and should not be submitted, because it makes no sense," Spruill said. "I did not carry through and make sure we were doing that. At the same time, I don't have each and every fender-bender reported to me, although now I think I do because I've asked for that."


Payments for minor incidents will come from individual departments' budgets instead of the insurance provider in the future. Ward 2 Alderman and budget chairperson Sandra Sistrunk said the board needs to take this into account while formulating the fiscal year 2021 budget, a process that will start in the next few weeks.


The new insurance package from Travelers includes some driver's education classes for city staff, and Spruill said the city will also use GPS tracking to determine if the car accidents are tied to a specific person or people.


"Hopefully that will impress upon everyone the significance of this, and the importance of $18,000 (more for insurance), especially while we're furloughing people to save funds," Spruill said.


Both a Liberty Mutual public affairs consultant and the local insurance broker Renasant Bank declined to comment on Liberty Mutual's decision not to renew coverage.





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