Texas School Insurance Facts
Impact of Harvey
Harvey by the Numbers:
Coastal (Tier 1) Schools
The impact of Hurricane Harvey on Southeast Texas and Louisiana was unprecedented. Insurance markets and reinsurers are now creating new risk models based on the damage caused by Harvey. Based on current conditions, coastal schools should expect moderate rate increases for both property and flood. After a major storm you may expect fewer insurance carriers quoting for your renewal. Schools that have a Q1 renewal date should be evaluating market options soon.
Inland schools have been experiencing an extremely volatile insurance market due to the severe hailstorms in central and northern Texas over the past few years. Based on current conditions, inland schools should expect rate and deductible increases, increased underwriting scrutiny, and less options than a year ago.
All school administrators and risk managers should review the lessons learned from Harvey to help ensure the best purchase decisions regarding coverage and emergency resources in the coming year – regardless of where you are located. The following are a few of the issues to review:
Property vs. Flood Limits
It is common that schools may purchase property coverage for full or near-full value of their property assets. Property coverages typically have a significantly lower sublimit for Flood – if included at all. While coastal schools have significant limits in place for Named-Storm Wind exposures, many found their Flood limits to be inadequate to cover the damage caused by Harvey. Flood limits should be reviewed and increased if necessary.
Wind-Driven Rain vs. Rising Water
The cause of the water damage determines whether the Wind or Flood limits apply. Rising water, whether from rain or storm surge, is typically excluded from Wind coverage and only covered under Flood limits. If provided in your property coverage,
damage from Wind-Driven Rain is typically excluded unless the wind creates an opening for the rain entry.
Many schools have “agreements in place” with firms for water damage mitigation and remediation. This can help with quicker response, and often these companies have already documented interior spaces which can help with recovery and restoration.
Operational Disaster Recovery
Major storms often affect so many that there are simply not enough recovery assets available for everyone. Prior agreements with Operational Disaster Recovery firms can ensure assets such as power generators, mobile offices, satellite internet and phone services can be made available quickly to help school administrators accelerate the recovery process.
About North American Solutions
For over 50 years, the NAS family of companies has served more than 4,000 public entities. North American Solutions helps clients reduce their property, casualty and workers’compensation insurance costs through global access to insurance markets and innovative risk management solutions.