Drug Policies Questioned : RTD’s Insurance Up 5,700% in Two Years

A $3.8-million insurance policy that costs 5,700% more than was paid just two years ago--and for less coverage--was approved Thursday by the Southern California Rapid Transit District board. But a transit official said before the district could get any coverage, underwriters had to be convinced that the RTD’s drug policies were sound.

Along those lines, the board in a separate action approved a $500,000 expansion of its existing drug-abuse program that calls for, among other things, the use of trained dogs to sniff out narcotics on RTD property.

The concern over drug use by district drivers stemmed from a May 12 incident in which an RTD bus driver who allegedly used cocaine crashed into another RTD bus at 5th and Main streets.

That accident focused public attention on drug use by RTD drivers, attention that spread to the insurance industry.

RTD Assistant General Manager John Richeson said that during negotiations with several insurance companies to provide $26 million in catastrophic, or excess, liability coverage, district officials were asked to explain the drug policies affecting RTD drivers.

Richeson said that transit officials spent an entire day trying to convince the insurance carriers that the district was dealing effectively with the drug problem. He added that in the insurance plan adopted Thursday, the underwriters did not exclude coverage for drug-related accidents and also did not base the premium increases on the past incidents.

Richeson said no insurer was willing to provide coverage with a deductible less than $4 million.

The $3.8 million premium--a $600,000 increase over last year--contrasts sharply with the $67,000 premium that the district paid in 1984 for almost identical coverage, except that the deductible then was $1.5 million.

Richeson said the district’s largest single pay out, $1.75 million, was made about two weeks ago to settle a personal injury lawsuit from 1981.

In adopting the insurance plan, the board also set aside $200,000 to map out a strategy so the district could become fully self-insured within a year.

The drug-abuse plan approved Thursday would involve advanced drug testing of RTD employees “displaying unusual behavior or to operators involved in an accident.”