Victoria school officials halted hurricane repairs because the insurance provider stopped paying the bills, the district’s superintendent said.
The district filed a lawsuit against its insurance provider, Property Casualty Alliance of Texas, for breach of contract and underpayment for Hurricane Harvey-related damages. The district is seeking almost $23 million in compensation.
“The lawsuit will allow us to put our schools and our campuses back into working order prior to the hurricane,” Superintendent Quintin Shepherd said. “That’s the whole reason we get insurance.”
Victoria school district changed its insurance policy in 2015 to Property Casualty Alliance of Texas, or PCAT. The contact, which was signed by former superintendent Robert Jaklich, is valid through September.
PCAT is a public school risk pool in Texas, which is geared for property and casualty coverage, according to its website. It was created in 2003 by Weatherford ISD and Duncanville ISD, and it services more than 130 school districts. PCAT describes itself as the largest public school risk pool in the country.
Shepherd said it is not traditional insurance, but it acts like typical insurance.
The school district sustained about $26.3 million in damages during Harvey, and received $3.5 million from PCAT. The suit seeks additional funds for repairs through its insurance provider. There is no indication the insurance provider will pay the remaining balance of about $23 million, Shepherd said, which led to the lawsuit.
“That’s what we estimate the total damages to be,” Shepherd said. “We haven’t been able to spend that much obviously because we don’t have that much available to spend.”
Officials with PCAT, which is based in Cypress, did not respond to requests for comment.
Repairs to the district were made with funds from the district’s insurance, FEMA and a one-year 11-cent tax increase, which was adopted in August 2018.
“The insurance provider has given us some money, and we spent that,” Shepherd said. “There have been other funds that have been spent to try and remediate the projects as best we’ve been able to, but we know we haven’t been able to do all the work that needed to be done. We were not able to recover.”
PCAT is responsible for paying the replacement value of damages during named storms, according to the district’s policy handbook. The district’s total property value is $407.2 million. The district pays a deductible of 2% per building, per occurrence with a minimum of $50,000.
“The district has done the work and then essentially reimbursed for work we have completed,” Shepherd said. “That’s why we’re in this precarious situation of not being able to do the work that needs to be done.”
Shepherd said the damages were estimated by the district, and PCAT is responsible for the repairs.
He said the district still has repairs that need to be made, but he said he could not go into details regarding the damages because it is pending litigation.
“It is an extensive list,” Shepherd said.