Resident Curatorship Program

Delaware State Parks

(302) 739-9186

Insurance

The curatorship property you are restoring for the State of Delaware is insured by the State against hazard loss (fire, flood, storm, earthquake, etc.) under the state’s self-insurance trust fund. You should be aware of three main points:

First, the Division of Parks and Recreation (DPR) is the indemnified party, not you the curator. This is because DPR, not you, owns the property as well as all the improvements you make to it, and is therefore the party with the insurable interest. It is DPR’s responsibility to file a claim in the event of partial or total loss of any or all of the curatorship structures. Such a claim is subject to a $500 deductible amount, payable by DPR. In the event that DPR cannot pay the deductible amount, you will have the option to pay it. This is a good deal for you: coverage with no premium and only a $500 deductible.

Second, this coverage extends only to the structures of the curatorship premises and does not extend to personal property owned by you, or others, which may be lost or damaged. It also does not provide liability for bodily injury to any person. And it does not provide for temporary accommodations for you during repair or reconstruction of damage caused by hazard. However, these are all areas of coverage which you should be able to purchase yourself with a tenant’s policy from a reputable insurance broker or company (this matter gets more treatment below). Moreover, your curatorship agreement requires you to have this type of coverage. If your personal property contains items of unusual value, such as antique furniture, you should have special riders on your tenant’s policy to cover such items’ full value.

Third, the extent to which you may have an insurable interest in the structures themselves – and thus the extent to which you yourself may be able to purchase insurance against hazard loss – has not been fully determined. This is due to the completely unique character of the curatorship program. The question is, do you the curator have any insurable interest in the structure(s)?

All curatorship agreements have language in them which may give curators an insurable interest:

“The Curators shall be responsible for the Curatorship structures being in the best condition, to which they are restored, at such time as the Curatorship terminates, normal wear and tear excepted;” and,

“The Curators acknowledge that they understand that the Curatorship structures and all improvements the Curators make to the structures as part of their gift to the State are, as real property owned by the State, covered against loss by fire, flood, or other hazard by the State self-insurance trust fund. The State may, but is not required to, rebuild State-owned structures that are damaged or destroyed by fire or otherwise. The Curators may seek to purchase, at their sole expense, additional hazard insurance for the Curatorship structures provided that any such policy shall name the State as co-insured.”

The intent of these sections is to give the curators grounds to convince an insurer that curators do, in fact, have an insurable interest in the structure(s) and all the improvements they make. Unresolved will be the issue of double insurance and who pays - the State’s self-insurance trust or your insurer - in the event of a loss.

From a realistic standpoint, should there be a total loss of a structure, its replacement, no matter who pays for it, is not likely to be a totally accurate reproduction of the lost structure. It is more likely to be a “functional equivalent,” that is, a new structure similar in size, proportion, and general construction finishes as the lost structure, but not a 100% accurate reproduction.

It would be to your advantage to have thorough and up-to-date documentation as to the condition, extent, type of construction and other information, on your curatorship structure(s), in the event of a loss, in order to demonstrate to an insurance adjuster how much reconstruction is justified. Photographs, measured drawings, receipts of work performed, even videos, are all recommended means of documentation. This information should be stored off-premises so as not to be lost if a structure is lost.

The general intent of DPR, in the event of a partial (say no more than 60%) hazard loss, would be to see the structure(s) restored as nearly as possible to the condition that existed at the time of loss and to resume the curatorship with the same curator(s). In the event of total loss, DPR may opt for a “functional equivalent” replacement, but you should be aware that DPR may opt for no replacement at all.

There are several recommendations you may wish to consider when you shop for insurance. First is the uniqueness of the curatorship program and the extent to which that uniqueness may affect your insurability. Many of the large insurance carriers who offer low rates are geared to insuring people with conventional living arrangements. Their standard tenant’s policy may not be suitable to curators. You may wish to consult with an independent broker who is willing to tailor a policy to your needs. And you should be prepared to pay higher rates. Be sure to include personal liability coverage and alternative accommodations in this policy.

Second, you should discuss with your broker the extent to which you can purchase coverage for the betterments and improvements. Standard betterments and improvements policies just cover things like paint and wallpaper that a tenant puts up, usually not to exceed 10% of the real value of the covered property. You need coverage for the far more substantial improvements you make, and such coverage is available, but you need to be specific when you discuss the matter with an insurance agent or broker. This may be the best way for you to protect your financial commitment to the curatorship structures.

Third, you should, of course, take reasonable steps to mitigate against hazard loss, and theft, by installing smoke detectors, fire extinguishers, intrusion alarms and the like. This not only affords you greater protection, but may increase your insurability and may decrease your rates.

Your curatorship agreement requires you to have a tenant’s policy protecting your personal possessions and giving you liability coverage. This policy can also provide alternative accommodations in case of loss to your curatorship property. You should submit annual copies of certificates of insurance, along with your annual accounts.

The statements, representations, and recommendations set down in this circular express a good faith effort to provide to Resident Curators the best advice possible under the unique conditions of the curatorship program. They should in no way be construed as representing contractual obligations on the part of the State of Delaware.