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Insurance hike prompts county cutback

A 600 percent increase in costs is causing Wasco County to cut back on its earthquake insurance.

The Board of County Commissioners voted Wednesday to follow the recommendation of the county’s insurance agent, Mike Courtney of Courtney Insurance Agency, to discontinue its practice of paying for an extra layer of earthquake insurance for county buildings.

Courtney said the county’s basic insurance package comes with $5 million in earthquake insurance, but the county has historically paid an extra $5,000 a year to add another $5 million to the policy. Next year the cost for that extra insurance will jump up to $30,000.

“In my opinion, it’s not worth paying $30,000 for the extra $5 million layer of coverage, but it’s whether or not you want to take that risk,” he said.

He said the big increase in cost could be blamed on the major earthquake and tsunami Japan experienced two years ago. The seismic activity that caused the quake has indicated to scientists that the West Coast of the United States is due for a massive earthquake, and insurance companies are taking that into account when calculating insurance costs.

Courtney noted that the total $10 million package wouldn’t be enough to cover the cost of rebuilding the courthouse alone if a catastrophic earthquake wiped out buildings around town.

“You’re going to pay for something that’s not even going to do the job,” he said.

He said it was his understanding that if an event became a federally declared disaster — which an earthquake causing more than $5 million in damage to county buildings would almost certainly be — then the Federal Emergency Management Agency (FEMA) would cover 75 percent of the replacement or repair of public buildings.

“Given the FEMA funding availability, I tend toward removal of the excess coverage,” he wrote in his cover letter to the board.

County administrative officer Tyler Stone said he tended to agree with Courtney, and the county commission voted unanimously to approve the recommendation to not pay for the excess insurance, bringing the county’s insurance bill for next year down from $188,314 to $158,314.

Courtney also brought up worker’s compensation and described the county’s worker injury frequency as “above average.” He told commissioners that he needed to do some training with department heads about when to file a claim because several were denied this year.

“If there is no medical expense then it’s not a reportable claim,” he said. “The incident can be logged by the county but it only becomes reportable when they sought medical attention.”

The total insurance package for the county includes $20,050 in auto liability insurance for the county’s 145 vehicles, the majority of which are owned by the road department and the sheriff’s department. Another $86,102 covers the county’s 45 properties and $51,435 is for general liability.

Courtney recommended the county use the annual pre-pay option to earn a 4 percent discount.

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