1. PROPERTY INSURANCE April 27, 2018

2. MARKET CONDITIONS
To date, this year, results are totally unexpected in view of Hurricane Harvey.
Seven Tier I and II districts:
Values 9.4 Billion
Savings $2.4 Million
Savings 14%
That will change.
Four had no Harvey insured damage (under deductible). Values 4B Savings 2.2 M -26%

3. WHY WILL IT CHANGE
Insurance companies use loss modeling (predictability) for pricing.
Hurricane Harvey occurred after the most recent calculations.
New models will be prepared later this year.
Because of Harvey, Flood maps will be redrawn.
MULTI-YEAR RATE GUARANTEE!

4. LOSS MODELING AIR or RMS (Risk Management Solutions).
Determine loss probability for 250, 500 & 1,000 year periods.
Gross values anticipate deductibles.
Ground Up values do not include deductibles.
Analysis includes Flood, Named Storm and Tornados or straight line Wind damage.

5. Gross
Flood
Hurricane
Tornado/Hail
200 Year .4%
7,643,910
17,469,804
13,195,791
500 Year .2%
9,135,776
31,405,022
17,923,406
1000 Yr .1%
10,280,803
49,250,102
32,557,006
Limits Purchased
10,000,000
50,000,000
200,000,000
Concentration may be used to determine the Tornado, Wind, Hail limit. What is the total value of all schools that are in close proximity to each other?

6. CONCENTRATION
Concentrated Values - Nimitz HS, DAB and Surrounding Area
ANDERSON ACADEMY
15,676,115
OGDEN ELEMENTARY
23,205,000
NIMITZ 9TH GRADE SCHOOL
34,146,796
NIMITZ SR. HIGH
80,759,681
DONALDSON ADMINISTRATION BLDG
13,242,450
LEWIS MIDDLE SCHOOL
39,376,674
TEAGUE MIDDLE SCHOOL
36,144,576
JOHNSON ELEMENTARY (Old location)
13,440,124
MARCELLA ELEMENTARY (formerly intermediate)
23,227,750
$ ,219,166

7. FLOOD Flood limits have been ignored. (Deweyville)
Request agent to order Flood Determinations on all property.
Zones will be redrawn because of Harvey.
Is zone based on location address or elevation of building?
Determine if any property is in a Flood Pool.
Flood zone identification at policy issue.

10. WIND DRIVEN RAIN Not covered by all policies.
Damage caused by water that does not enter a through a breach in the building shell.
Water through windows, doors & roof structures ponds & rises.
Several districts had such damage.

11. DEDUCTIBLES Districts experienced % deductibles for the first time.
In many instances the deductible was surprisingly high. It felt like no insurance.
% based on scheduled value of building – not of the loss. $100M building = $5M deductible.
Should be based on damaged property only.
Consider Maximum Deductible.

12. FEMA RELIANCE
Some districts purchased minimum limits of insurance, relying on FEMA.
“FEMA representatives express that School Districts and local governments must make a reasonable effort to purchase adequate insurance. Following the receipt of FEMA assistance after a loss, FEMA may impose an “Obtain & Maintain” condition that limits their future responsibilities as set forth within the Stafford Act. Therefore, purchasing higher limits for the perils of Wind, Flood and other related expenses will become more important in the future.”

13. RFP HINTS Calendar – start five months prior (see FAQs).
Market Assignments – blocking, agent of record.
Statement of Values – Roofs, Flood zones.
Values – HS $160/sf, MS $150/sf, ES $140/sf.
Agreed Amount, No Co-insurance, Blanket.
Terrorism – Domestic, Foreign, Shooter, Bomber.
Risk Pools - Audited Financials & Reinsurance.
Layer diagram – easy to understand.

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