Legislation mandates full insurance coverage for state-owned properties

House Bill 524, introduced in the Kentucky State Legislature on March 6, 2025, aims to enhance the insurance requirements for state-owned properties managed by educational institutions. The bill mandates that these institutions secure insurance coverage that reflects the full replacement cost of their buildings and contents, ensuring adequate financial protection against potential losses.

Key provisions of House Bill 524 include stipulations that each insured building must be appraised by a licensed professional experienced in commercial or governmental property. The bill specifies that the insurance must cover 100% of the replacement cost, which accounts for any increased construction costs due to code changes since the original building was constructed. Additionally, the bill outlines minimum coverage amounts for various types of insurance, including ordinance and law coverage, debris removal, and extra expense coverage, with specific dollar thresholds set for each.

The introduction of this bill has sparked discussions among lawmakers regarding the financial implications for educational institutions and the state budget. Proponents argue that the bill is essential for safeguarding state assets and ensuring that institutions are not left vulnerable in the event of disasters. Critics, however, express concerns about the potential financial burden on schools, particularly smaller institutions that may struggle to meet the new insurance requirements.

The economic implications of House Bill 524 could be significant, as it may lead to increased insurance premiums for state institutions. This could divert funds from educational programs and services, raising questions about the balance between adequate protection and fiscal responsibility.

As the bill progresses through the legislative process, stakeholders are closely monitoring its developments. If passed, House Bill 524 could set a precedent for how state properties are insured in Kentucky, potentially influencing similar legislation in other states. The next steps will involve committee reviews and discussions, where further amendments may be proposed to address concerns raised during initial debates.