Framingham Finds New Insurance Carrier
Officials in Framingham expect to save up to $400,000 on the town's municipal insurance coverage by switching away from the Boston-based nonprofit Massachusetts Interlocal Insurance Association (MIIA) and getting coverage from international carrier Trident.
The move highlights the competitive market for insurance and the fruits of shopping for lower prices, according to David Williams, Framingham's assistant town administrator and chief procurement officer.
"There's always someone out there looking to earn your business," he said.
Money Matters
Last month's decision to migrate away from the MIIA was not made hastily. Officials have spent seven months mulling it over. The town had not had a formal request for new insurance quotes in eight years, so Williams thought it was time.
Officials worked with NorthStar Insurance Services in Needham, which is an independent insurance broker that frequently works with Trident, to evaluate options.
Williams expects that the town will get as good coverage, if not better, from Trident for a lower cost.
While MIIA premiums were expected to be about $1.3 million, Trident offered a policy for $950,000.
Trident lowered some deductibles and eliminated others, Williams said.
The MIIA policy, on the other hand, was set to increase an estimated 20 percent starting July 1 of this year.
Trident also offered the town a three-year stabilization of rates. If the town's four-year average claims loss is below a threshold of 50 percent, then Trident has promised to cap any rate increases at no more than 3.5 percent.
There could be some external factors contributing to Framingham's increased rates, however. In 2007 the South Middlesex Opportunity Council, or SMOC, sued the town as part of an anti-discrimination suit. According to media reports at the time, the nonprofit advocacy group alleged that Framingham attempted to block SMOC from locating various support services in the town.
Williams said MIIA has paid out "a couple million" dollars related to the suit during the past three years.
Despite Framingham's leaving MIIA, its director said the organization is strong.
Overall enrollment in the program has steadily increased the past few years, according to Stan Corcoran, its executive vice president.
It's just a fact of a competitive market that some individual communities will find lower prices, he said.
"From my perspective, we've been steady as you go, with a slight increase in members," he said.
While Corcoran would not discuss policies with individual communities, he said he's focused instead on the overall growth of MIIA.
MIIA works with more than 300 communities and government agencies to provide insurance. Because of its nonprofit status and the fact that MIIA only insures municipalities or government entities, Corcoran said it is an expert in the field.
The organization works hard to provide competitive rates, he said. For example, MIIA provides training programs to help communities reduce the risk of incurring a loss. Communities get credits for attending such training sessions.
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