As property insurance premiums continue to wreak havoc on Louisianans’ pocketbooks, NOLA Public Schools officials said Tuesday the 44,000-student school district and its charter schools are not immune. 

After a nearly 50 percent increase last year, Chief Financial Officer Stuart Gay told Orleans Parish School Board members at their monthly committee meeting that the district may not know the cost of its annual property-insurance premiums by the start of its fiscal year, July 1.

“It’s been a rough go — even getting to the point of proposed rates,” Gay said, regarding proposed liability and other insurance rates that the board will review on Thursday. 

The continued insurance increases are problematic and could affect school programming, Board President Olin Parker said.

“The increase that we’re seeing is unsustainable for our district,” he said. “Things like insurance costs have the ability to blow a giant hole in our budget and the types of services we can provide to our students.”

The district owns more than 100 properties, the majority of them school buildings. Most of those buildings house charter schools, though some sit empty. 

Crescent City Schools Chief Operating Officer Chris Hines said his charter network pays property insurance on a per-pupil rate calculated by the district. He believes those fees cover unoccupied district buildings as well. 

The district confirmed it pays a “pro-rata portion of the premium for vacant facilities” and office space, but it’s unclear how that’s calculated. The Lens has asked for additional clarification on which facilities that covers. Board member Katie Baudouin said to the best of her knowledge, charters’ only pay property insurance for the buildings they occupy.

The insurance issue is rising to the fore at a time when the city’s uniquely decentralized all-charter district is facing enrollment declines. And because forecasted enrollment growth did not occur and independent charters compete to enroll students, that leaves some schools under-enrolled. 

Running under-enrolled schools drives up the per-pupil cost of operating each campus. The district is actively working to “right-size” by closing and merging charter schools, and offloading some of the excess properties or renting them out. But it’s a years-long process.

The insurance crisis has become exponentially worse in recent years, following Hurricanes Laura, Ida and Zeta and other storms that bombarded insurance companies and led to the collapse of several insurers in Louisiana. Across the country, insurers have begun pulling out of markets, with Allstate and State Farm recently announcing they wouldn’t insure new clients in California. A recent LSU survey showed 17% of Louisiana homeowners lost their homeowners insurance last year and thousands have resorted to the state’s insurer of last-resort.

Last summer, following Hurricane Ida, the district’s property insurance increased by nearly 50 percent, by more than $4 million – from $7.6 million in the 2021-22 school year to $11.2 million for the 2022-23 school year.

The figure for the upcoming school year remains unknown, Executive Director of Risk Management Tracey Griffin-Robertson told board members. The board will likely hear its annual budget Thursday without knowing the figure for the upcoming school year.

“In the entire time I’ve been doing work for the district, I’ve never had a year like this.” Griffin-Robertson.

Board member Katie Baudouin asked when the district typically received renewal quotes.

“I don’t know that we function in ‘normal’ anymore,” Griffin-Robertson said. “If you’d asked me that question seven years ago I would probably have said in April, no later than May.”

Griffin-Robertson emphasized that these delays affect the district fleshing out its own budget and also postpone necessary information for the city’s independent charter schools that need to pass their own annual budgets, which come through the district and must be approved by their own separate charter boards in the coming months.

“Unfortunately, this year has been a historical one for the insurance industry in that regard, she said.”

Years before the dramatic rate increases of recent years, charter schools within the state-run Recovery School District enjoyed state-wide pooled property insurance — much cheaper than metro rates. The RSD was headquartered at the Louisiana Department of Education in Baton Rouge. In fact, in the mid-2010s, several RSD charters opted to stay under RSD control for that very reason, they said, rather than return to the oversight of Orleans Parish School Board and its much higher insurance rates.

The delay is understandable, but it does create challenges for budgeting for the upcoming school year, Crescent City Schools Chief Operating Officer Chris Hines said in an email. “Our rates are calculated on a per pupil basis. It’s $187.24 per pupil this year.”

That’s on top of the 2% administrative fee that charters pay to the school board each year. And in addition to an annual $4.17 “per pupil damage fee” that the district added to building leases in 2021, that runs for three years. The fee was added to cover maintenance and repair costs associated with school move-outs, even though maintenance is a requirement of leases. 

“Not having this figure, or an estimate, creates an extra challenge for us in budgeting for the upcoming year,” Hines wrote. “But I know that with the current insurance market, it’s hard to get quotes from carriers until shortly before the policies’ renewal dates.”

Need to elevate

The feeling of looming increases felt very real, said Baudouin, who said she was speaking from personal experience. She wondered what happened at the end of the month, when the current coverage ran out. “We will be covered? There won’t be a lapse?” 

“Correct.” Griffin-Robertson said.

“Are we considering rates doubling?” Baudouin asked.

“No indication at this point … Everybody is extremely tight-lipped,” Griffin-Robertson said.

Maybe state representatives could find a solution, suggested Board President Olin Parker. 

Agreed, said board member Nolan Marshall Jr., who took it even further. 

“This is a conversation that needs to be had with not only our state officials but federal officials,” Marshall said, mentioning tornadoes and wildfires. “Across the country, all kinds of catastrophic events — we need to look at it at a national level.” 

Systemic solutions are needed, said Griffin-Robertson, likely summarizing what many in the room were thinking.

“It’s a national issue,” she said, noting that the federally backed National Flood Insurance Program was created in the aftermath of Hurricane Betsy. Because private insurers had paid out so much after the floods of 1917, almost no flood insurance was available to homeowners at the time Betsy struck. They had to rely on family, friends and charitable help for relief after disasters.

Though the Flood Insurance program has seen increases in recent years it’s been a bit more “uniform” compared to property insurance increases, Griffin-Robertson said.

As climate change creates more disasters across the country, stable insurance rates are a necessity for schools and community centers and other hubs that help to stabilize communities after disasters.

“We definitely need input from our larger stakeholders to help us continue to live in this area, with some degree of comfort, knowing that should an event happen, that we have recourse via insurance to help us rebuild and put our lives back together,” Griffin-Robertson said. “And as of today all of that is very tenuous, there’s no certainty there.”

Clarification: This story was updated with a comment from the district and board member Katie Baudouin.

Marta Jewson

Marta Jewson covers education in New Orleans for The Lens. She began her reporting career covering charter schools for The Lens and helped found the hyperlocal news site Mid-City Messenger. Jewson returned...