Insurance
Well, What Do You Know? The Private Market Comes to the Rescue
Marketplace solutions.
As more schools consider arming their employees, some districts are encountering a daunting economic hurdle: insurance carriers threatening to raise their premiums or revoke coverage entirely.
During legislative sessions this year, seven states enacted laws permitting teachers or administrators to carry guns in schools. Three of the measures — in Kansas, South Dakota and Tennessee — took effect last week.
But already, EMC Insurance Companies, the liability insurance provider for about 90 percent of Kansas school districts, has sent a letter to its agents saying that schools permitting employees to carry concealed handguns would be declined coverage.
“We are making this underwriting decision simply to protect the financial security of our company,” the letter said.
(Yaccino)
The NYT also notes other schools running into this sort of trouble. Jenny Emery of the Association of Governmental Risk Pools esplained, "I haven't seen evidence yet that suggests people are determining that arming teachers is a recommended way to manage risk. Far from it." Schools in Oregon, Tennessee, South Dakota, and Kansas are all facing difficult insurance questions about plans to put more guns on school campuses.
To the other, Kansas and Texas are leading the way for states looking to arm their teachers:
For three Kansas community colleges, which were insured by EMC but decided to allow concealed carry on their campuses under the new law, the search for another insurance provider was easier than expected.
Dan Barwick, the president of Independence Community College, said his college and two others recently signed a joint insurance plan with another company at a rate that he expected would save the group about $2 million over the next decade. Advocates for arming teachers point to the colleges as evidence that some insurance providers are willing to stomach the risk, should K-12 schools in Kansas decide to shop around
“What will happen is the market will take care of this,” said Forrest Knox, a Kansas state senator who helped pass the concealed carry legislation. “Other companies are going to do the dollars and cents.”
That theory is certainly true in states like Texas, where strong tort protections have made it easier for about 30 districts to arm their employees this year. Dubravka Romano, who oversees a cooperative that insures about half of the state's 1,035 districts, said schools there were not charged extra for having guns on campus.
In the end, there are always market players willing to play according to dollars and cents. But how long before the numbers inform those players? Take Texas as an example; the laws limit all sorts of liability in the name of improving business. Like, say, storage of explosive chemicals and safety inspections. And, what in all those years the West Fertilizer Company Facility only really had
one accident. It's probably worth the trade to Texans; just think of all the business Texas has attracted because of that sort of regulatory environment.
And so it goes. Meanwhile, consider Los Angeles. Compared to a school district with a grand total of 103 students, even smaller cities like Seattle, Tacoma, Boise, Portland, Salem .... Well, okay, in the first place, you probably couldn't sell the school boards on the idea. But if you could, the insurance hit would be tremendous. A town of four hundred operating under extraordinary circumstances in an environment with special liability protection saving five dollars per student by switching insurance companies? The numbers, at least, make sense. But not so with a fifty-five square mile school district with a student population in excess of twenty-eight thousand, spread over fifty-seven campus facilities, a staff of over 5,000, and a $280m budget that represents a $4m revenue shortfall. And that's the
third largest district in the state of Washington. The actuarial outlook just can't support that kind of endeavor. Tacoma is still climbing out of a gang violence problem that has long plagued the city. The last thing they need right now is more bullets flying.
And Los Angeles? Over 1,100 campus facilities in LAUSD. Nearly half the student body enrolled in year-round schools. A student population of over 660,000. Nearly 32,000 teachers. So big that in addition to two unions to deal with, one of them is for Los Angeles teachers specifically. Budgeted at $7.3b, it's the
second largest school district in the country, and it is plagued by the fact of being
underfunded. I cannot imagine the actuarial outlook on arming LAUSD teachers is encouraging.
In the end, the private sector might well be what keeps teachers unarmed in most of the school districts around the nation. And it will be interesting to see if conservative legislatures and executives in the states will establish a publicly-financed liability insurance market in order to arm schoolteachers, or follow the Texas anti-regulatory lead.
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Notes:
Yaccino, Steven. "Schools Seeking to Arm Employees Hit Hurdle on Insurance". The New York Times. July 7, 2013. NYTimes.com. July 9, 2013. http://www.nytimes.com/2013/07/08/us/schools-seeking-to-arm-employees-hit-hurdle-on-insurance.html
Wikipedia. "Tacoma Public Schools". June 14, 2013. En.Wikipedia.org. July 9, 2013. http://en.wikipedia.org/wiki/Tacoma_Public_Schools
—————. "Los Angeles Unified School District". June 9, 2013. En.Wikipedia.org. July 9, 2013. http://en.wikipedia.org/wiki/Los_Angeles_Unified_School_District