Modern life raises school district’s insurance rates

The 9.35% increase in the Humboldt County School District may raise eyebrows among the general public but for insurers the increase is no surprise.

The increase is due, in part, to a string of natural disasters that have hit the United States and around the globe.  Natural disasters cost the country $91 billion in 2018, according to a recent report from the National Oceanic and Atmospheric Administration (NOAA). The economic losses are due to 14 different natural disasters, ranging from hurricanes to wildfires to winter storms.

Eighty percent, or $73 billion, of the total loss was attributable to just three events: Hurricane Michael in Florida, Hurricane Florence in the Carolinas, and wildfires in the West, including the Martin fire north of Paradise Valley and the Woolsey and Camp fires in California. The Camp fire destroyed 18,804 structures alone and the Woolsey fire destroyed 1,643 structures. 

According to the report, 2018 had the fourth-highest total costs from natural disasters since NOAA started tracking this data in 1980. It also marked the eighth consecutive year with eight or more natural disasters that cost at least $1 billion each.

A & H Insurance sales representative Marianne Dente, who presented the insurance package to the Humboldt County School District’s Trustees, emphasized the importance of having flood and earthquake insurance. She pointed out that the Reno area had experienced a 3.7 magnitude earthquake in June and Tonopah had a 4.2 magnitude earthquake in May. 

But other factors also dictated the rate increase.

As part of the modern life, there are new kinds of coverages that the school must consider such as a cyber-attack. Included in the reality of contemporary living is committing a wrongful act. According to the website, a wrongful act refers to “any error or breach of conduct covered under professional liability insurance, which provides the officers and directors of an insured company financial protection from the liability arising from alleged erroneous acts. Aside from errors and breach of conduct, wrongful acts include breach of duty, neglect, misstatement, omission, or anything for which a claim is filed against them or the company. Wrongful acts do not include theft, libel, slander and dishonesty.”

Scott Rottman, a sales representative and principal for A & H Insurance who was also present at the board meeting, said automobile insurance rates have also increased. “There are slight increases and decreases but auto is on a really steep incline right now,” he told the Trustees. He attributes the increase to new safety technologies featured on newer car models. Such technology has made vehicles more complex and more expensive to repair overall. Many new cars feature electronic components throughout the vehicle, as opposed to the simpler features found in the past.  This increases the costs for insurance companies. 

However, the insurance agents don’t anticipate the rates to increase at such a steep rate in the future. “I wouldn't say that I would anticipate this to be every year a 9% but we did have some catastrophic situations in the past year or two,” Dente told the Trustees.