Insurance, Purchasing, and Stores Management

Abstract

STUDIES dealing with school insurance problems during the period 193537 are not numerous, but for those which have appeared the central theme seems to be that any school insurance program ought to be organized on a businesslike plan. A complete appraisal of school property is stressed more than any other factor. The excellent description of the school insurance program of Norfolk, Nebraska, by Burkhardt (377) should indicate to other school districts what can be done in this matter. He reported a reduction of 70 percent in insurance costs during a five-year period. The initial approach to the reduction was a complete appraisal of buildings and equipment. Burkhardt listed six factors which made possible such marked savings: (a) reducing the amount of insurance on many old buildings; (b) changing the classification of much of the equipment to buildings; (c) making rate adjustments by remedying certain little defects; (d) purchasing the insurance on a five-year basis at the cost of four years, with a one-fifth premium due each year; (e) being alert to take advantage of general rate reductions; and (f) using 80 percent coinsurance. It was also shown how Montclair, New Jersey, has improved its school insurance program by putting it on a businesslike plan, starting with annual appraisal based on current (393). Other changes were achieved by writing five-year insurance with one-fifth of the total insurance expiring annually, and after an examination in order to comply fully with the rules and regulations of the Schedule Rating Office. The result of such changes reduced the annual average from .247 to .116. Besides the financial saving effected, an appraisal is of no little importance in leaving with the board a complete survey of school property including insurance rates for each building. Baldwin (373) also stressed the importance of an appraisal of the school property. His explanation of the terms appraisal, of a building, and were very clear. He stressed the need of provable appraisals particularly with coinsurance, in that as values fluctuate the insurance must change or the value of the insurance for protection purposes will suffer. Additional arguments given for having an appraisal are that the cost of one is usually less than one half of 1 percent of the cost of a new building and it is only necessary once. Another report made by a schoolboard told how study of the insurance problem meant returns in the form of reduced costs, greater safety for