As weather extremes spawn flooding and other natural disasters, property insurance costs go up. Brian Chilson

Gov. Sarah Sanders gave a bit of welcome news yesterday to Arkansas school districts struggling with a huge rise in property insurance premiums: She’s authorized the state to cover 30% of the cost increase, pending legislative approval.

School districts in the state face “substantial premium increases for the upcoming school year, averaging nearly 130%,” the governor’s office said in a press release.


To state the obvious, a 30% boost in funding won’t cover a 130% increase in premium. Presumably districts will still be on the hook for the other 100% (that is, their rates will still double, on average). A spokeswoman for the governor said the 30% funding increase is expected to cost the state around $11 million — hardly so generous, considering the state just booked a $1.16 billion budget surplus for the fiscal year that just ended, its second-largest ever.

Sanders called the premium hikes “outrageous” and appeared to accuse insurers of price gouging. “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,” she said.


So what’s behind the premiums? The Arkansas Democrat-Gazette filled in some gaps by speaking with Tony Prothro, director of the Arkansas School Boards Association, which buys coverage on behalf of most of the districts in the state through Lloyd’s of London:

Prothro said the association began purchasing property damage coverage through Lloyd’s after claims from schools started increasing, which were mostly due to tornadoes, strong winds, hail damage and flash freezing.

While Arkansas has been hit with a spate of severe whether in recent years, storms across the nation also have contributed to the recent increase in insurance premiums — up anywhere from 100% to 200% for the 179 school districts the Arkansas School Boards Association covers, Prothro said.

Left unspoken by the newspaper, and by the governor, is the fact that the overall increase in severe weather events is likely driven by climate change: 1,000-year floods in New England, longer wildfire seasons in the West, heavier rainfall in the South, and so on. No, the recent Arkansas storms can’t be directly blamed on climate change; no single event can. But in general, the more damage caused by floods, fires, storms and other disasters, the more insurance claims are filed. The more claims filed, the more companies hike premiums.


Schools are far from the only ones affected. If you buy home insurance, there’s a good chance your premium has increased substantially in recent years.

School districts also face other growing risks that have nothing to do with climate, the Arkansas Advocate noted today, such as the cost of ransomware attacks.


To be fair, none of that necessarily shows Sanders is wrong about insurers gouging customers; both could be true. But to treat the rise in premiums as a mystery with “no reasonable justification” is to ignore the most obvious (but politically inconvenient) explanation.