Brazos County debates insurance coverage

Is Brazos County getting the best bang for its buck when it comes to insurance coverage?

That was the question Commissioner Fred Brown put to Leslie Contreras, the county's risk manager, at the April 7 session of commissioners court while discussing the county's insurance coverage. The commissioners were discussing renewal of insurance coverage for county buildings, building contents and mobile equipment with the Texas Association of Counties (TAC) when Brown complained about the lack of bids for the contract.

"What I'd like to know is what we paid for this same coverage last year, and what do we anticipate that the cost will be this year, and why we never go out for bid. How come we always use the Texas Association of Counties?" Brown said.

Contreras said the contract last year was for about $500,000 and she anticipates it being about the same this year.

"We have two policies through Texas Association counties," Contreras said. "One is for property, and we do that around this timeframe. And then the other is through TAC for general liability, which also includes our law enforcement, public official insurance and auto."

Contreras said she doesn't have a problem looking elsewhere for insurance coverage, but she strongly encouraged staying with TAC.

"TAC is a not-for-profit association. It's a risk management pool, and it is pooled with county funds, not just our funds, but counties all around Texas," she said. "They serve only counties. They do not serve cities. They do not serve private entities or anything like that. So they're custom for county-type of liability. They just understand liability better because they deal with it on a regular basis."

TAC provides member counties with a host of services, including insurance, legal help, legislative support, conferences and training, and other programs and services.

"I think my whole issue is, when you're talking about half a million-dollar expenditure, it wouldn't hurt for us to go out in the open market and get some bids to make sure that what we're getting from TAC is a good deal, because we don't know if we never ask," Brown said.

"I don't disagree with you," Contreras said. "I will say that TAC provides things that other entities won't. We would have to pay them outside of the policy to get those same services, which includes HR training, risk management training, law enforcement training, you know, conferences, all that kind of stuff. That's why I recommend to stay with them, because it's not just about how much money we're paying, but it's also about the services that we gain from that."

Brown continued to press his point that there might be cheaper insurance available on the open market.

"It may end up at the end of the day, that TAC is the best deal, but I'm leery, because I know a lot about TAC when I was in the Legislature, and it wasn't good," he said.

Contreras pointed out that Brown is now on the other side of the table and that TAC lobbies on behalf of counties. Brown remained skeptical.

"I have not drunk the Kool-Aid," he said.

"Well, I kind of have, because I'm on one of the boards, so I am pro-TAC and I believe that they deliver a good product," countered Commissioner Wanda Watson.

Contreras noted that the city of Bryan was dropped by its insurer after a disaster in 2020 and 2021.

"Bryan's policy holders dropped them because they had too many cars damaged. We had 100 so we would have been dropped probably from that insurance policy. But since we had TAC, they just don't do that," she said.

Commissioner Chuck Konderla said he sees the value in keeping insurance with TAC.

"TAC to me, there is always going to be a cheaper option. And the city of Bryan saw what that gets you. It gets you dropped. To me, Texas with tornadoes, floods, anything that we have going on, TAC to me, looks like a giant shock absorber," he said.

Watson pointed out that a lot of private insurers have exclusions in their policies that make them risky, not to mention that they could be dropped if they make a claim, which TAC will not do.

"It's no different than your personal car insurance or your house insurance. The minute there's a situation they're wanting to potentially either drop you or increase your cost," she said.

Brown reiterated his position that they need to watch costs for the taxpayers and also noted his experience with TAC.

"All I'm trying to do is just keep them honest," he said. "I went to battle with TAC last year with the pharmacy benefit manager, because they were only paying us 50% of the rebates. Well, those are our rebates, and I beat up on them …. I got up to 75% and in reality, we need to get 100%. But that's the kind of things you got to look at when you're dealing with TAC to make sure that you're getting the best deal. At the end of the day, we'll probably end up staying with them. I just want to know that we're getting a good deal."

At the end of the discussion, County Judge Duane Peters called for the vote. It passed unanimously.