Senator Eliot Shapleigh - El Paso, Texas

The Texas Governor's Mansion, which was heavily damaged by an arson fire in June, is one of many state-owned properties not insured against fire, storms or attack.

The Texas Capitol, damaged by fire in 1983, the 91 state-run prisons and most other state buildings are not covered by insurance, either.

The Legislature has not set aside money to cover potential property losses through self-insurance, despite what the State Office of Risk Management said is a persistent myth that there is a dedicated fund and uniform process for filing claims.

In the wake of the mansion fire, state officials have repeatedly said that the governor's residence is self-insured by the state, pointing to the reserves in the state's rainy day fund as a ready source of money for an emergency.

That account, which has often been tapped by the Legislature for nonemergency items, is expected to have $5.7 billion going into the 2010-2011 budget that begins Sept. 1, 2009.

"There is no dedicated fund, but there is the funding," said Krista Piferrer, spokeswoman for Gov. Rick Perry.

A 1921 Senate Concurrent Resolution says the "state shall carry its own insurance upon state buildings and contents." But that resolution was never codified, and the lack of a funded reserve or other policy means the state property is "in practice uninsured," said a 2007 risk management office report to the Legislature.

In effect, that means the state assumes the cost of any catastrophic losses.

Texas has left the decision about whether to insure to each state agency, and those that don't must absorb in their budget the cost of repairs to uninsured and damaged properties or seek additional money from the Legislature.

Different states have varied approaches to insuring property, depending upon their exposure to threats, the values of the properties and the concentration of buildings.

Florida covers all state-owned buildings and contents through a self-insurance fund. Other states have private insurance or some combination of self-insurance and private coverage.

Lawton Swan, a Florida-based insurance and risk management consultant, said the question for policymakers is "how badly can you be hurt before it is really going to hurt the citizenry of the state?"

Texas is a good candidate for self-insurance because of its resources and size, meaning that an event that hits West Texas is not likely to affect East Texas, said Swan, a past president of the national Chartered Property Casualty Underwriters Society.

Without insurance, he said, the state takes its chances and has no formal plan to pay for damages.

"Self-insurance is not noninsurance," Swan said. "If I choose to self-insure, then I need to earmark some money so that it is not used for something other than" property losses.

Fifteen state entities, including the Texas Youth Commission and Texas State University System, have insured their property under a program overseen by the risk management office. That program covers buildings and contents worth more than $9 billion. No comparable figure for the state's uninsured assets was available.

The state's property losses spiked to $55.6 million in 2006 after Hurricane Rita.

The State Preservation Board, which manages the governor's mansion and the Capitol, did not respond to a request for comment on the state's lack of insurance for most buildings.

The Texas Department of Criminal Justice referred questions to the Texas Facilities Commission, which also did not respond.

But for an idea of the costs, consider that the Governor's Mansion was being renovated at the time of the fire, and that the renovations were estimated to cost $10 million, to be paid by taxpayers. Damage estimates from the fire have not been determined.

In 1983, what was then the lieutenant governor's apartment behind the Senate chamber in the Capitol was damaged by fire. Damage was estimated at $2.5 million. Officials were so concerned about fire hazards in the historic building that the Legislature approved a $187 million restoration and expansion project in 1989, also funded by taxpayers.

Last year, the risk management office recommended that the Legislature set aside money for a statewide property self-insurance program, much like it has done for state workers' compensation. Having such a reserve would provide adequate funding, standardize the response after a loss and ensure coverage of all state facilities, according to a written response to questions submitted to the office.

Nothing came of the recommendation, and the risk management office wrote that it has not been directed to design such a program for future consideration.

The issue has not been on the Legislature's radar screen. But Piferrer said that might change after such a high-profile loss at the Governor's Mansion.

Until the mid-1990s, the University of Texas System had a similar approach, covering only buildings where insurance was required, such as those built using bond money, said Phil Dendy, director of risk management.

It has since created a systemwide program that combines self-insurance and private insurance to cover all $23 billion in assets.

All the institutions in the system contribute money to a fund that will pay for up to $5 million in damages, after the institution meets a $250,000 deductible. Beyond that $5 million threshold, private insurance picks up the tab for damages.

Dendy said it is responsible business practice to have coverage against major catastrophes; otherwise, money for repairs has to be taken from elsewhere in the system's budget.

"We think it is the right thing to do," Dendy said.

The City of Austin and Travis County have private insurance coverage for their properties.

With such a tight cluster of county buildings in downtown Austin, the risk is too high that a tornado or some other event could damage multiple buildings, and the county could not afford to repair it all, said risk manager Dan Mansour. The downtown campus has been insured up to $200 million.

Texas state agencies that have property insurance

State properties owned by the following agencies are insured for more than $9 billion through a State Office of Risk Management program.

Credit Union Commission

Texas Board of Professional Engineers

Texas Youth Commission

Texas Parks and Wildlife Department

General Land Office

Banking Department of Texas

Employees Retirement System of Texas

Texas Department of State Health Services

Adjutant General's Department

University of North Texas System

Stephen F. Austin State University

Texas Public Finance Authority

Texas State University System

University of Houston System

Texas State Technical College System

Source: State Office of Risk Management

How do governments handle insurance?

State: Largely uninsured; 15 agencies have self-insurance.

University of Texas System: Combination of self-insurance and private insurance.

Travis County: Private insurance.

City of Austin: Private insurance