Seen in the Sun-Sentinel:
Citing exorbitant premium costs in the insurance market, district administrators bought only $50 million in coverage for 2007. That’s down from $125 million last year and $200 million each year from 2002 to 2005.
Despite the limited coverage this year, most major school property losses should be reimbursed by the Federal Emergency Management Agency, said Dianne Howard, director of employee benefits and risk management.
While the insurance covers the total value of the district’s properties, estimated at $4.75 billion, the district can potentially recover only up to $50 million per disaster or hurricane.
The second paragraph highlights one of the conundrums in the high cost of catastrophe coverage. If it is too expensive to acquire insurance in the private market, it is tempting to trust in legislators’ love of handing money out in the wake of major disaster.