The board shall require school districts to insure at their own expense for the benefit of the state, all sites, equipment and buildings which are, under Section 17030, the property of the state, against such risks and in such amounts as the board may deem necessary to protect the interests of the state. No project funds shall be used to pay the premiums on such insurance. All payments resulting from claims made against said insurance shall be made payable to and retained by the board. Funds so received shall be utilized by the board for repair or replacement of the facilities for which claim was made. In no event may the amounts expended from such funds for such repair or replacement exceed the payments received.