MORGANTOWN — The West Virginia Board of Risk and Insurance Management (BRIM) has notified Mountain Line that it is canceling the transit authority’s insurance.
The news is going to result in a three-fold increase in insurance costs, at least in the short term.
BRIM is a state agency that provides property and liability insurance to governmental entities within West Virginia. The goal was to keep insurance costs down so government could focus on providing necessary services.
But in the wake of massive payouts in recent years — more than $100 million in 2023 — lawmakers tweaked how the agency is able to operate.
“The legislation changed a bit where they could not increase premiums, but what they did allow them to do is drop their clients. So, we are in that basket,” Mountain Line General Manager Maria Smith explained during an emergency special meeting held Friday.
Smith added, “There are a lot of other transit systems that have either been notified or they know they will be notified.”
The cuts extend beyond public transit.
The city of Westover was notified last month that it was being dropped.
The city moved its insurance to WVcorp, the public entity risk pool established in 2007. The transit board made the same decision on Friday.
Due to the number of settlements paid out by BRIM on Westover’s behalf, the move actually dropped the city’s insurance costs by about $20,000 annually.
That’s decidedly not the case with Mountain Line.
The transit authority planned to pay BRIM $113,827 for liability, auto and property coverage this year.
The $5,000 deductible plan through WVcorp selected by the board carries an annual cost of $375,510.
“That was a very low rate. BRIM has not changed those rates for as long as I can remember,” Smith said. “They probably should have, and we wouldn’t be in this position. But here we are.”
To cover insurance for the next nine months, the transit authority approved moving $210,000 out of its contingency fund, leaving a balance of about $29,000.
WVcorp Administrator Chris Carey said the self-insurance group has grown from 19 counties in 2007 to more than 400 government participants.
Monongalia County moved its liability coverage to WVcorp in October of 2018.
“We are collecting just over $30 million in premiums right now. Probably approaching $32 million. We only take $500,000 of risk per claim, and we buy reinsurance above that. We have about a $20 million surplus right now,” Carey said.
“From a service perspective, we are handling claims with a staff that is about three times larger than what BRIM would have. It’s not just a little fly-by-night organization offering this coverage.”
Carey went on to say that WVcorp has lost a total of eight members over the last 17 years.
“If we weren’t handling claims correctly, or to the way our members want us to handle claims, we would not have grown from 19 to 400,” he said.
Smith said she intends to explore all options during the next budget season.
“But at this point, in talking with the other transit systems, this has come up as the best option for us,” she said. “The reason I would open it back up is because there are some national transit insurance providers that we might be able to get the attention of. I don’t know if we’re too small for them or not, but there is that opportunity.”
