July 05--School districts across Central Florida are betting that a hurricane won't hit here and cause more damage than their meager insurance policies cover.
And if we do get hit, school leaders are counting on the federal government to bail them out.
Rising insurance premiums, officials say, have forced them to reduce coverage to a fraction of building values. Orange, Seminole, Lake, Osceola and Volusia county school districts all have scant insurance against big storms.
Districts are relying on the Federal Emergency Management Agency to open its checkbook for school repairs, which could run to billions of dollars across the state if a major storm strikes. FEMA has helped school districts cover hurricane losses in the past but can't promise what its contribution would be next time.
Mary Olsen, a FEMA spokeswoman, cautioned that "counting on federal assistance is not a prudent substitute for maintaining adequate insurance coverage."
But school districts throughout Florida are facing an insurance squeeze.
In Orange County, school buildings totaling $4.3 billion in value have only $30 million in coverage for hurricanes and other named storms, such as the recent Tropical Storm Debby.
That's as if a home valued at $430,000 had only $3,000 of insurance coverage.
"I believe it is adequate," said Pat Hafer-Plunkett, director of risk management for Orange schools, which is paying one of the highest premiums for the least coverage among the five area school districts.
"The likelihood of an entire school building being totally destroyed by a hurricane is not too prominent," she said. "And when you scatter the loss over 190 buildings, the likelihood of those getting totally destroyed is not too high, either."
Orange's storm insurance premium is up 8 percent this year to $2.6 million. Officials increased the deductible to avoid paying more and are looking to FEMA for backup.
In Seminole, school officials are not comfortable with the $50 million in coverage they approved last week for the school year starting July 1. That's down from $150 million in coverage this past school year and $200 million the previous year.
"It is an issue of affordability," said George Kosmac, deputy superintendent of Seminole schools.
Kosmac said that keeping storm coverage at $150 million would have cost twice as much this year.
"We couldn't afford that, so we ratcheted down the coverage to $50 million," which still cost 21 percent more than last year, he said.
Seminole is also counting on FEMA to come to its rescue, although Kosmac is concerned about restrictions that the federal agency also points out.
"FEMA does kick in, but only if you have purchased a reasonable amount of insurance," Kosmac said.
Kosmac and other area school officials say insurance companies are hiking premiums because the odds of future claims increase for every year the districts escape a bad hurricane season. As insurance costs go up, districts are forced to reduce coverage.
The 2004 hurricane season, with its slew of storms, is the baseline that districts are using to gauge their risk. Orange schools had minimal damage, reinforcing the belief that minimal coverage is sufficient.
"Even with four hurricanes, we didn't get anything totally destroyed," Hafer-Plunkett said.
But Seminole's experience was scarier. Hurricane Charley ripped off the roof of the school district's office in Sanford, requiring $4 million in repairs. Charley also damaged four other school facilities and 105 portable classrooms.
Costs of repairs and cleanup totaled $6.5 million.
Volusia schools were even harder hit by the 2004 storms, with damages totaling nearly $18 million.
And in Charlotte County on the Gulf Coast, Charley flattened six of the county's 20 schools, underlining the potential threat to school buildings.
Still, school officials say they have to juggle the threat of hurricanes against the cost of insurance and what the district can afford, especially in tough economic times when the districts are shedding jobs, shutting down student programs, closing schools and making other budget cuts.
"It is a concern," Seminole School Board member Dede Schaffner said. "But we have to be realistic."
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