Arkansas Schools Face 130% Increase in Property Premiums, Seek Financial Assistance

An Arkansas subcommittee last week approved Gov. Sarah Huckabee Sanders’ request for close to $11 million from the state’s restricted reserve fund to offset costs for school districts facing soaring property insurance costs.

Arkansas school districts are facing an average increase of 130% in property premiums for fiscal year 2024. The rise in premiums is due to a convergence of factors including poor claims experience, difficult conditions in the insurance marketplace and a negative outlook from weather models, Arkansas Insurance Commissioner Alan McClain wrote in a July 11 requesting money from the restricted reserve fund.

Sanders said in a statement the state would cover 30% of the cost increase pending legislative approval.

“What these insurance providers are doing to our schools is outrageous,” said Sanders. “They gave districts no reasonable justification for skyrocketing premium costs. It’s clear that they’re just trying to line their pockets on the backs of Arkansas children and taxpayers. To prevent our districts from facing financial difficulties, my administration is stepping up to help them cover rising premium costs.”

The Arkansas Legislative Council Executive Subcommittee recommended the Legislative Council approve a $10.8 million from the restricted reserve fund that will be split three ways. The 170 school districts participating in the insurance program managed by the Arkansas School Boards Association would receive $6.3 million, the 68 districts in the Arkansas Public School Insurance Trust would receive $4.46 million, and $118,000 to the Bentonville School District, procures insurance directly through the open market.