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News & Developments

Property Coverage for a Changing Economy - Part I

In the news

The Eugene School District is preparing for significant budget cuts, due to the worsening Oregon economy and declining projections for tax revenues (www.4j.lane.edu).

Last week, the Confederation of School Administrators surveyed roughly two-thirds of Oregon's 199 school districts [.]. Of the 140 school districts who responded, 40.7 percent answered that staff layoffs would be likely, as well as reduced spending for text books, nutrition programs, field trips and other costs (www.kcby.com).

The Oregon City School District held a public forum Tuesday to discuss how it will overcome a $6 million shortfall in next year's budget. The closure of the Park Place school is one of the options being considered by the district and many parents said they're worried about having to send their children to another school (www.kptv.com).

As tightening budgets force tough choices, many districts are making the decision to consolidate their operations into fewer buildings, leaving some vacant. Unfortunately, this move can significantly change the district's needs regarding property and casualty coverage for the now vacant building. Failure to properly address this situation may create extra expense for the district. 

When an insurance agent evaluates the district's coverage needs for a particular building, they look at many factors. If the building is not in use, or if there has been a change in how a building is used, then the insurance agent needs to reevaluate what coverage, and amount of coverage, best meets the needs of the district. For example, a vacant building has a greater exposure to vandalism, but a lower exposure for injuries to students. 

In the event that you change the occupancy status of any covered structure, please notify your insurance agent immediately. Your agent can advise you of any changes in coverage or premium, and then make recommendations regarding which coverage options are best for your new situation.