As part of an insurance risk pool, you’ve heard us emphasize many times the importance of working together to reduce risks and keep our rates as low as possible, so more dollars end up in the classroom. You’re doing your part, and we cannot thank you enough for that.
Catastrophic events around the world, like hurricanes, earthquakes, wildfires and tornados, are driving up rates dramatically and creating turmoil in reinsurance markets. Reinsurance, as you may recall, provides that vital top layer of coverage into the tens of millions of dollars for catastrophes.
As we look toward fiscal 2023-24 and renewals coming up in June, we are projecting average PACE premium increases of as much as 15 to 20%. Please note that these are averages and each member’s rate will differ based on claims and other factors. We know that you are entering budget season and we want to provide you ample time to plan.
Premium increases are projected based on an average 8% rate increase, coupled with the need to significantly raise the insured values of the more than $25 billion in property that PACE covers. Why increase property valuations? Construction costs are soaring, and if a member experiences a loss we will need to make sure the property valuations are accurately assessed to replace damaged structures.
While premium increases are never welcome, it’s important to note that in this high-inflation environment worldwide PACE continues to provide significant savings to members. We are not an insurance company and have no profit motive whatsoever. We are simply about keeping students safe, reducing risks and conserving member resources.
As always, we welcome and encourage you to contact your agent of record or our Underwriting Department if you have questions or suggestions. We remain committed to keeping PACE fiscally responsible and providing the coverage you need should disaster strike.