As we start New Year, we often reflect back on significant events of the prior period and plan changes to make during the year to come.
APEI’s pinnacle claim event in 2015 was the November 3rd fire at the LKSD Kuskokwim Learning Academy and Kilbuck school in Bethel. This was the most significant property loss for the APEI pool program in the company’s history, and this incident exemplifies the benefit of being an active APEI member. Press photos present graphic images of the devastating damages to both building and contents, and the fire required both school programs to relocate to other premises until rebuilding can occur. As we all know, with these challenging public operating budgets, it is the actual economic loss sustained or “bottom line number” that is of immediate concern to the member.
Total estimated costs are still being calculated by construction experts, APEI claims staff, and independent adjusters working alongside school district officials, but early estimates indicate that costs for this fire may eventually exceed $21 million - including structure, contents, and additional expense (such as the costs for temporarily relocating the classrooms). Regardless of the final rebuilding cost, the bottom line is the APEI manuscript policy terms will provide replacement cost protection for the school district.
Will this severe loss impact future policy renewal premiums? APEI staff and our excess insurance brokers met with the property excess carriers in early December to discuss a number of issues, including the fire in Bethel and renewal plans for the 2016/17 policy year. The initial response from our excess carriers was positive – while no one likes to pay for losses of this magnitude, they are expected to occur periodically, and the existence of a single large loss is not a significant cause for concern. The excess carriers do not anticipate that there will be any significant changes to our renewal premiums as a result of this rare severe fire claim.
As to future plans for 2016, APEI staff is committed to continue to improve our policy terms and conditions to respond to ongoing changes in public services rendered by our members. We anticipate revising our coverage agreements to directly address in-house student accident and volunteer protections. Other form revisions are being considered and if you have any suggestions or particular concerns, please submit them by email or give us a call to discuss.