By Paul A. Anthony, Editor in Chief

As Texas’ insurance crisis continues, a policy change from one of the university’s providers could cause problems for those renting cars with university funds. This includes those intending to travel on Spring Break Campaigns and departmental trips.

Traveler’s Insurance now only provides liability insurance to rental cars, meaning those wishing to travel must find their own collision coverage or drive without it.

“Overall, as far as the insurance industry is concerned, rental cars have been unprofitable,” said Stomi Callaway, the university’s contact with Perry Hunter Hall Inc., a commercial insurance company in Abilene that consolidates the various policies the university holds.

Callaway said rental car policies have been losing ventures for insurance companies because of the high number of claims and payouts inherent in the field.

The policy, enacted this year, creates problems for the Spring Break Campaigns Committee, which had planned to send an unusually large number of driving campaigns because of high airfares.

Now, campaign leaders who drive may need to pay extra for additional insurance coverage or hope for the best over spring break.

“Right now, we’re going forward as if we do have insurance,” said Clay Rich, travel coordinator for the committee and sophomore accounting and finance major from Abilene. “We’re encouraging drivers to have their own personal insurance.”

That matter is complicated because most rental companies will not rent minivans to anyone under age 25, and some leaders have raised concerns about driving without personal or collision coverage.

“Most campaigns, if they do fly, pick up vans when they get there,” Rich said. “Most of our campaigns do drive in some form.”

The revelation is the latest case where a statewide crisis is affecting the university. The first was an insurance premium spike of 85 percent-$400,000 more than the administration expected.

The university now pays upwards of $850,000 in insurance premiums, said Nelda Gilbreth, who oversees the university’s insurance policies while working in the office of Kevin Watson, chief administrative services officer.

“We’re not just covered by one company,” Gilbreth said. “Workers’ compensation also went up. Everything went up.”

The state’s crisis has several root causes, the first of which is the south’s growing black mold problem. Insurance companies have gagged on skyrocketing insurance claims and monstrous settlements.

Adding this to a swarm of claims related to Sept. 11, the sagging stock market and the sluggish economy, national insurance companies decided to jack up premiums in Texas or, as was the case of Farmers Insurance Group, to get out of the state altogether. Farmers announced it would drop all 700,000 of its Texas accounts earlier this year.

And Traveler’s decided to drop personal and collision coverage from car rentals, which is complicating but not deterring the plans for spring break 2003, Rich said.

“I don’t think it’ll put an end to Spring Break Campaigns,” he said, “but it’ll hinder us in some way.”