Arkansas school districts are facing an increase in property insurance premiums averaging almost 130%. Climate change is one reason and a big one, but as a June 27 article in Education Week noted, it’s not the only factor driving up insurance costs for schools.
First, however, is the damage wrought by increasing and increasingly severe storms and other weather events. Insurance companies have pulled out of states like Florida and California.
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State Insurance Commissioner Alan McClain cited “a convergence of factors” in Arkansas: “poor claims experience, difficult conditions in the insurance marketplace and a negative outlook from weather models.”
Gov. Sarah Huckabee Sanders has said that the state will cover 30% of the cost of the public schools’ higher property premiums.
But Education Week also points to higher costs for other kinds of insurance taken out by schools, citing “new laws allowing more lawsuits over sexual abuse,” which are increasing legal liability.
In addition, the article noted the increasing number of cyberattacks on school districts, which are leading to increased premiums for cybersecurity insurance. One such attack last year cost the Little Rock School District almost $692,000.
Finally, the insurance industry is volatile, as is pricing, but nothing in our current circumstances appears likely to quell that volatility. School districts will need to take all of this into account.
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