Underinsured Universities Getting New Coverage

Only 15 percent of the Ole Miss campus has full property insurance. That will change with a new IHL insurance pool.

A change in insurance coverage will cost some Mississippi universities more. But as MPB’s Cari Gervin reports, the state will actually save money.

Until now, each public university has maintained its own property insurance. That will change next week, when all eight schools become part of a insurance pool organized by the State Institutions of Higher Learning.

Larry Sparks is the Vice-Chancellor for Administration and Finance at the University of Mississippi. He says just 15 percent of the replacement value of the estimated $1.3 billion campus is covered under the current policy. Previously, he says, the school could count on additional state funding if something bad happened.

After Hurricane Katrina, that’s no longer the case.

“Because of the frequency of disasters and the frequencies of payouts, the state and the federal governments have realized that we cannot continue to stand behind these and remain with the status quo. We have to pass that cost on, the cost of insurance on, to those individual entities.”

Mississippi State has a similarly low amount of coverage. Budgeted insurance costs will double or triple for the two large schools under the new plan. But smaller universities will save money.

IHL Board member Aubrey Patterson says the legislature mandated the change, but it made sense anyway.

“You know, it’s an operating expense. It’s an investment in the safety and security of the facilities that the state Mississippi owns for the benefit of its people.”

The policy is expected to cost the state over $3 million next year. Patterson says that the total cost is a savings of $200,000, despite the increase in coverage.

For MPB News, I’m Cari Gervin in Oxford.