August 19, 2025

California School Districts Face Rising Insurance Costs

News Summary

California school districts are struggling with dramatically increased insurance costs due to the implementation of Assembly Bill 218, which allows survivors of childhood sexual assault to file lawsuits. Since the law’s enactment, litigation against schools has surged, leading to a quadrupling of insurance premiums. Many districts face challenging financial decisions, including delaying staff hires and canceling programs. The projected expenses for sexual abuse lawsuits are anticipated to skyrocket, creating a worrying scenario for the financial stability of educational institutions.

California – California school districts are grappling with unprecedented insurance costs following the implementation of state legislation aimed at addressing childhood sexual assault claims. A significant law, Assembly Bill 218 (AB218), took effect in 2020, allowing survivors more avenues to sue for historical abuse, which has led to a dramatic surge in litigation against public educational institutions.

Since the enactment of AB218, the number of claims filed against school districts has reportedly tripled. Consequently, insurance premiums for public school systems have quadrupled since 2019, according to a report released by the California Association of Joint Powers Authorities (CAJPA). Even districts that are not currently facing lawsuits under AB218 are feeling the financial strain as pooled insurance arrangements are causing costs to rise across the board.

The increase in insurance liabilities is forcing many school districts to make tough financial decisions. Some have opted to delay salary raises and hiring essential staff. For instance, the Bass Lake Joint Union Elementary School District experienced a jump in insurance costs from $26,000 to $87,000, which directly impacted its hiring capabilities. Meanwhile, the Huntington Beach City School District had to cancel its plans for a state-mandated transitional kindergarten program due to the tripling of insurance costs.

The report by CAJPA found that litigation costs for lawsuits against public entities have increased threefold since 2019, with overall expenses linked to settling sexual abuse lawsuits skyrocketing as well. Tax revenues designated for such settlements have risen dramatically; from $278 million during the 2019-20 fiscal year, the projection for 2023-24 stands at an alarming $843 million, with estimates suggesting the total could reach $1.9 billion by 2026-27.

A worrying trend has emerged as many U.S. insurers have stopped providing coverage for California school districts. This lack of local options has compelled organizations such as the Schools Excess Liability Fund to turn to international providers, with approximately 70% of their insurance coverage now sourced from the UK and Bermuda.

Legislative Background

AB218 empowers survivors of childhood sexual assault to file claims until the age of 40 and created a special three-year window that allows those with older allegations to come forward. As a result, many districts are now facing lawsuits that involve claims from decades ago, compounding their financial challenges even further. The pressure of these rising costs is particularly acute for smaller districts, which are increasingly concerned about the possibility of bankruptcy.

Despite the mounting challenges, legislative efforts to curb the impact of rising insurance costs have seen limited success. Proposed bills designed to address these issues have stalled, leaving school districts without the relief they desperately seek. Key figures, including the author of AB218, have expressed awareness of the financial burdens that these rising costs impose on public schools. Calls to cap attorney fees in such cases have been discussed as a potential compromise.

Concerns and Future Outlook

Assembly Member Dawn Addis has commented on the delicate balance between providing justice for survivors of childhood sexual abuse and the need for financial stability within school districts. As financial pressures mount, the broader context reveals a complex struggle: the need to address past wrongs while ensuring that current educational frameworks are not destabilized by escalating costs.

Reports of school districts delaying critical programs due to insurance expenses signal deeper problems ahead. With litigation costs continuing to rise and insurance premiums soaring, the community faces considerable challenges as it strives to balance legal justice and educational responsibilities.

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Author: STAFF HERE HUNTINGTON BEACH

The Huntington Beach Staff Writer represents the experienced team at HEREHuntingtonBeach.com, your go-to source for actionable local news and information in Huntington Beach, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Huntington Beach Surf City USA Marathon, the U.S. Open of Surfing, Fourth of July celebrations at the Huntington Beach Pier, and community festivals at Huntington Beach Central Park. Our coverage extends to key organizations like the Huntington Beach Chamber of Commerce and Visit Huntington Beach, plus leading businesses in retail, hospitality, and outdoor recreation that drive the local economy. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.

STAFF HERE HUNTINGTON BEACH

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