The Naples Daily News is carrying a story on the challenges being faced by local schools in getting property insurance coverage.
Lee County will pay 75 percent more in premiums but get less than one-sixth of the coverage it had last year. Instead of insuring $300 million of the district’s $1.4 billion insurable property, the district will receive $48.6 million in coverage, cobbled together from 10 different companies. That’s about enough to build one high school from scratch.
Rucker says the district struggled to get even that much.
“One of our biggest problems is just getting insurance at all,” she said.
DeBaun said it was not just Hurricane Wilma that caused the district’s premiums to go up. It was hurricane damage from Katrina and Rita, as well as tropical storms on the East Coast, that contributed.
Yes, I know, it’s yet another version of the same story. The market has hardened dramatically after two extraordinary storm seasons. The schools’ headaches may be aggravated as property insurers seem to like large schedules of property less than they have in previous years, because of the increased awareness of geographic concentrations.
Schools and municipalities also might have the extra whammy of the nature of their reconstruction efforts. I’ve sat in on some claims calls pertaining to school district losses, where the back-and-forth caused by the politics of a government entity trying to decide what it wants to do have been nontrivial issues in the settlement process.
While I’m not an underwriter, perhaps it would be wise for municipalities and school districts to include some pre-made disaster/reconstruction plans in their broker submissions when shopping for coverage, to make their risk look a little less intimidating.