By JIM BUTLER
The Rapides Parish School Board could consider itself fortunate even though its property insurance for the new fiscal year will cost about $1 million more than this year, for less coverage.
Upheaval in the insurance industry – a combination of extraordinary weather-related claims and regulatory changes – has many carriers leaving the state and others just declining to offer coverage.
The board this year paid $1.4 million for $100 million in coverage, that being the total claim figure allowable for the year.
The quote for the new year’s policy is $2.35 million, for $25 million total claims.
That is an offer secured through a consortium of six carriers. According to the board’s insurance consultant, 37 other carriers declined participation.
The board this year secured a re-evaluation of its properties’ values, as recommended by its consultant.
Without the update, the consultant said, it’s unlikely the board would have received any coverage proposals.
System property values total rose from $632 million to about $1 billion.
How much insurance is enough? There’s no concrete answer. In this case the board has to accept that $25 million is enough.
That sum is the total available for any and all claims for the year, in an ordinary year likely more than enough. Yet the extraordinary has to be accounted for.
Board members questioned how long the spiral in premium costs and industry shakeup might last.
There is no finite answer, they were told. The most obvious factor would be a substantial stretch without record-setting calamitous weather disasters.
Self-insurance could be considered an option but FEMA rules regarding how much annually has to be allocated to the insurance fund make that a seemingly cost-prohibitive option.
