A recent phone call came from a church in Fort Worth that had concerns about their property insurance coverage. They had large church buildings and were frustrated by the recurring premium increases over the last few years.
They thought they had found a great solution, but were worried they were missing something. The church was contemplating joining a risk purchasing group to save on their church insurance premiums. At first, everything looked good. The policy building coverage was enough, and the price was much better than what they had before.
Then they looked at the details. Their wind and hail deductible was 5% of their total church property value with this specialized policy. That was a big surprise. With over $40 million in property coverage, they would have to pay $2,000,000 out of pocket before the insurance would even start helping on a hail claim. It made the team stop and wonder if this was a great option for them after all.
They aren’t alone. More and more Texas churches are finding higher deductibles on their insurance policies. It’s become one of the biggest changes churches face today when looking at coverage.
Deductibles Are Increasing in High-Risk Areas
In Texas, big storms happen often. Hail, wind, and hurricanes cause huge property damage losses every year. Insurance carriers have changed the way they handle that risk. One big way they are changing church building insurance coverage is by raising the minimum deductibles, especially for wind and hail damage.
Risk purchasing groups like the one the Fort Worth church was looking at have become a popular solution to help churches get better pricing by spreading coverage risks across many groups and areas. The tradeoff is that these policies are usually meant for big disasters, not small repairs. They often come with higher deductibles because they don’t want to deal with lots of small insurance claims. That keeps the costs down but means more money out of pocket when substantial damage is incurred by your church.
For many churches, especially in storm-prone areas like North Texas, these large separate deductibles have become the new norm. We used to think that a two percent deductible was large. These potential risks would love to get those back.
Changing Minimum Deductibles Is A Problem
Once an insurance provider sets a minimum deductible, there usually isn’t much you can do to change it. Even if the church board in Fort Worth wanted to pay more for a lower deductible, the company would say no. This can be frustrating, especially for churches that have always had flat deductibles for this type of coverage in the past.
That’s where deductible buy down policies come in. These are separate policies that help lower the amount a church has to pay when a hail damage claim happens. The Fort Worth church learned about this option from their church insurance specialist. It gave them peace of mind knowing they wouldn’t have to come up with a massive amount of money if a storm hit. And pairing this new twist with their new church insurance policy through the risk purchasing group can help them save on premium costs as well.
The way that deductible buy down policies work is that they take that 5% deductible and reduce it back to 2% of the property replacement costs for the covered claim. While reducing the out of pocket costs a church might have during a claim, they can also reduce the insurance costs since they are focused on a single common risk like hail damage. This shifts potential risk exposure to a different company which has a big impact on insurance premiums.
Higher Deductibles Can Lead to Lower Premiums (But Bigger Risks)
Our insurance agents have had several Texas churches pick higher deductibles to save money on their premium. This works, but it also means understanding the profile of storm risks in churches with large roof lines. If a storm hits and causes severe damage, your church has to pay a lot before insurance helps with covered damage.
On the other side of this equation is balancing your total insurance costs against your church insurance premium. Churches with smaller deductibles tend to file more claims. They need to think about the downstream effects of these claims. Filing many small claims again and again can hurt you later. Insurance companies look at your overall claim history. If they see lots of small claims, they might raise your premium or not offer you church insurance coverage in the future.
The Fort Worth church decided that insurance should be used for big problems, not small fixes. They worked out a plan for how they would handle smaller issues without turning to insurance every time. That helped protect them from additional premium and made it easier to manage long-term costs.
Working With a Church Insurance Specialist Makes a Difference
The church in Fort Worth felt overwhelmed when they first saw their deductible. They didn’t know what to ask or what options they had. But when they started working with a church insurance specialist at Insurance For Texans, things became clear.
They learned what their deductible meant both from coverage and out of pocket costs. They found a deductible buy down policy to help offset some of that potential risk. And they figured out how to use their insurance in a way that protected their budget and their church property.
If your church is facing high deductibles or changing policies, you don’t have to figure it out alone. Working with an experienced, church insurance agent can help you navigate this tricky road. True Texas Church Insurance is designed to help churches identify their unique needs and ministries to better understand what essential coverage they need along with appropriate coverage limits.
This program can only be found at Insurance For Texans. Let us help guide you to understanding what comprehensive insurance coverage means to your church, and how to secure it. Click the button below to talk to a church insurance specialist who understands Texas churches and can help you find the best solution.