Schools, municipalities tackle insurance rate increases

Galloway-Chandler-McKinney Insurance agent Mike Manning said a major component in the increase of property insurance premiums across the country has been catastrophes, such as hurricanes, tornadoes and wildfires.

“I read in a trade journal recently that in 2021 there were nine catastrophic events that resulted in over $1 billion in claims, and insurance underwriters have to recoup their losses.” he said.

Meteorologist Meredith Wyatt with the National Weather Service-Memphis foresees possible ingredients in further active weather for this year, although she cautions the agency does more post-event evaluation than predicting trends.

“Certain areas of the country are on the uptick, and heat is having an early season impact. We rely on getting our cues from the National Hurricane Center,” she said.

According to the National Oceanic and Atmospheric Administration’s Climate Prediction Center, above-average hurricane activity is predicted again this year, which would make for the seventh consecutive above-average hurricane season in a row.

School districts are caught in a bind between keeping themselves adequately covered and deciding on where to cut expenses in the face of rising costs for all needs, including insurance premiums.

Monroe County School District Superintendent Dr. Chad O’Brian is looking at a $54,000 hike in the premium for general liability and property coverage for the district.

“It’s always a concern. We could hire another teacher for that amount, yet we don’t want to leave ourselves vulnerable by cutting our coverage,” he said.

O’Brian is grateful for inheriting a district in good financial standings.

“We have contingency funds laid aside for anticipated needs such as replacing air conditioning equipment or computers, but the unknowns can be scary. Everything’s crazy right now. We don’t want to cut back on insurance. If we had to cut expenses, I’m not sure I have a good answer at this point,” he said.

Whereas school districts have the choice of insuring with the Mississippi School Boards Association or a commercial carrier, Monroe County’s general liability coverage is provided by the Mississippi Association of Supervisors Insurance Trust (MASIT), according to chancery clerk Ronnie Boozer.

“We’ve been a member with MASIT for as long as it has existed,” he said.

Boozer described the last couple of years as being good despite the impacts of the COVID-19 pandemic, severe weather and decreases in federal funding.

“We’ve been fortunate to have good growth, so tax increases have been minimal and our insurance increases have not been a tremendous burden. We have had terrible years in the past,” he said.

Boozer said an increase in the county’s number of vehicles has impacted the additional insurance needed.

“Our appraised values on our buildings also went up by $2 million,” he said.

According to Manning, insurance underwriters do their own appraisals of the properties they cover and make adjustments without any input from their clients.

“Sometimes rate adjustments are prorated over time to lessen the impact of the higher rates,” he said.

City of Aberdeen Comptroller Karen Crump shed some light on another area where employers are affected by insurance rates – health coverage for employees. She said the city has benefited from rates for employee coverage being locked in for a couple of years.

“We are not expecting a large increase to force revisiting current policy, which covers 100 percent of insurance benefits for employees,” she said.

She added there are factors that increased rates for the city’s liability coverage.

“Our liability insurance did increase due to an increase in vehicle accidents and employee injuries,” she said.

Smithville Mayor Phil Goodwin has engaged in a detailed review of all expenditures since being elected, including insurance.

“We’ve been working with our underwriter to trim unnecessary coverage for the town’s assets. So far, we’ve saved about $3,000 per year in premiums, and I’m not through yet,” he said.

Since the town’s insurance renewal quotes have not increased substantially, Goodwin has achieved a net savings in premium costs through careful management.