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How Can We Lower the Deductible?

(LtoR) Deputy Police Chief Larry Cattano, B.A. Adam Cruz and Paul Messerschmidt from Dietz & Hammer Alternative Solutions *Photo by Carolyn Maxwell

(LtoR) Deputy Police Chief Larry Cattano, B.A. Adam Cruz and Paul Messerschmidt from Dietz & Hammer Alternative Solutions
*Photo by Carolyn Maxwell

PERTH AMBOY – Paul Messerschmidt from D&H Alternative Risk Solutions made a presentation at the 5/9/16 Caucus Meeting.

This was at the request of Business Administrator Adam Cruz. Messerschmidt is the Manager of Property and Casualty Claims at D&H. This firm handles risk management and a third party administration for insurance.

Messerschmidt said, “Perth Amboy is a founding member of the JIF (Joint Insurance Fund).There are seven towns in it all together. It’s a General Liability (Public Entity Joint Insurance).”

He went on to explain some of the deductibles for general liability such as slips and falls.  “The deductible is $250,000 for $1 million worth of coverage. There is a $500,000 deductible for $3 million coverage. There is a deductible of $1 million for $15 million coverage. There is also different coverages for land use which covers the Zoning Board, Public Officials and Employed Liability. There’s a $25,000 deductible for Hacking Liability. Other coverages include $50,000 for buildings,  $15,000 for vehicles and bond coverage for pollution.”

Council President Lisa Nanton asked Messerschmidt, “How can we lower our deductibles?

Messerschmidt answered, “It depends on the Third Quarter Reports on what the City has paid out so far in suits. The training the City provides for their employees helps with your premiums. Workers Compensation Coverage has risen because of medical costs going up. Some of the training includes employees from the Department of Public Works and the Police Department. This training not only protects those departments, but the public. The joint insurance fund notifies the City of all training available.”

Deputy Chief Larry Cattano added some comments, “All of our supervisors are constantly going through all required training. All of our Police Department Employees report positive experience with all training programs they have attended.”

After Cattano spoke, Messerschmidt told the Council, “My firm can provide settlements on any given year.”

Council President Nanton said, “I would like the numbers for the last three years.”

Messerschmidt cautioned, “Numbers can be skewered depending on if there was a large settlement. We can give settlements and claim petitions.”

Later during the public portion, Resident Messerschmidt answered concerns about a question that was asked from a resident in regards to if the City can cut cost by looking at other insurance companies.

Messerschmidt said, “The City could look into other insurance companies that are not as highly rated. The City has a $500,000 deductible per claim for Workers Compensation which are the rates set by the State.”

During the public portion, Resident Ken Balut came up to speak. He wanted to know if Messerschmidt’s company had any kind of relationship with Gartland (Insurance Broker Frank Gartland pleaded guilty in 2012 of bilking the Perth Amboy School Board of $2.5 million). Balut also wanted to know if referral commissions are being given.

Messerschmidt was taken aback by Balut’s questions, especially when it came to Gartalnd. “I have no idea who Gartland is. The City is provided with different insurers. The Joint Insurance Fund picks out attorneys based on their expertise.  The City has a choice who they want.”

Balut answered back, “I talked to a JIF Representative at the League of Municipalities and they said that this does not go out to bid.”

Messerschmidt stated, “We get lawsuits that are filed, but have not yet been submitted to the City.”

Law Director Arlene Quinones-Perez interjected, “We have to be properly served with a claim. It may take sometime before it comes in.”

Councilman Fernando Irizarry spoke up, “People think we are intentionally trying to hide claims.”

Law Director Quinones-Perez, said, “We are not trying to hide any cases.”

Resident Alan Silber talked about three Police Officers who were indicted in Woodbridge for false testimony for covering up a fellow Police Officer’s whose personal vehicle crashed. “Their names were on the front page of newspapers. The 3 Officers in Perth Amboy who were involved involved in giving false testimony that sent a man to jail for three months went to training. Maybe our deductible should be higher. Gartland was a huge story. I’m surprised our Attorney didn’t know anything about it. I appreciate you (Messerschmidt) coming here. Gartland and others tried to hide money. When a Police Officer lies about something, you have to look at their past testimony in other cases.”

Messerschmidt answered, “Insurance plans will go down if you raise your deductibles.”

Silber responded, “When we become more liable, we will be more cautious.”

Resident David Caba came up to speak, “This is why people do whatever they want. Mr. Silber was correct. The Police Officer didn’t cause any harm. This story about the 3 Woodbridge Cops was not social media. It was on the front page of a newspaper.” Caba turned his attention to the Dixon Rodriguez case from a few years ago. “If it were your kid who was shot, it would be a whole different story.”

Caba continued, “The people supporting the Mayor are out of order. The man that was shot was mentally disabled. I still believe he didn’t have a knife.”

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