The Texas economy has been a wild ride over the last ten years. There have been many ups and downs, and churches have seen their fair share of obstacles to overcome.
The finance committee at the church in San Antonio felt secure after navigating these challenges. One way they handled this was finding a new source for property insurance that saved substantial dollars on their insurance coverage.
Then came last summer. One of "those" severe storms dropped baseball-sized hail directly on their neighborhood. The sound inside the sanctuary was deafening, like thousands of hammers hitting the building all at once.
When the storm passed, the damage was obvious. The church had a large, flat TPO roof. It is a durable commercial material, but it is expensive to install. The hail had shredded the membrane, and water was already finding its way into the building.
The committee chair called the insurance company immediately. They weren't worried. They had paid their premiums on time, and they expected the insurance policy to do its part.
The adjuster arrived a few days later and confirmed the roof was a total loss. The church's roofer had estimated the roof replacement would cost more than $150,000 with current labor and material prices in San Antonio. This was going to be the biggest insurance claim the church had ever had.
That is when the adjuster pulled out the insurance policy documents. He turned to a page near the back and pointed to coverage limitations. Their policy had a roof sublimit. It stated that for any damage caused by wind or hail to the roof, the payout was limited to a maximum of $50,000.
The room went silent. The replacement cost was $150,000. The check from the insurance company would be $50,000. The church was looking at $100,000 that had to come from somewhere.
The property insurance savings they had celebrated at renewal evaporated in that single moment. They were on the hook for a six-figure repair bill they had no way to pay.
The Deal That Isn't a Deal
What happened to that church in San Antonio is becoming a common tragedy across Texas. Insurance providers have been losing money due to the frequency and severity of storms in our state. Roofs are the single biggest source of those losses.
To stop the bleeding, commercial property insurance companies are getting creative. They cannot raise rates high enough to cover the risk, so they limit the risk instead. They have introduce Roof Sublimits.
This is a cap on how much the insurance company will pay for damage to your roof, regardless of what the rest of the policy says. Your property insurance coverage might list a limit of $2 million, leading you to believe you have plenty of coverage. But that specific endorsement overrides the main limit when it comes to the roof.
It is designed to look like a deal. The agent presenting the quote might point out the attractive premium. But if they don't explain the fine print, they are handing you a ticking time bomb.
Three Positives of a Roof Sublimit
Believe it or not, this isn't always a scam. There are specific scenarios where a roof sublimit makes sense for a church, provided they understand exactly what they are signing up for.
1. Substantially Lower Premiums
The primary benefit is cost savings. By accepting a cap on the payout for roof damage, the church significantly reduces the insurance company's risk exposure. In return, the carrier offers a lower premium. For a church that is struggling to keep the doors open and simply cannot afford a full replacement cost policy, this can be a lifeline. It allows them to carry liability coverage and protect the rest of the building while accepting a known risk on the roof.
2. Increased Insurability for Older Roofs
Texas carriers are becoming incredibly strict about roof age. Many companies simply refuse to insure a church with a roof older than 15 years. If they do offer terms, it will likely be actual cash value. A roof sublimit can make sense if it increases the roof coverage offered on an insurance policy.
3. Allows for Self-Insured Retention
For a church with a robust building reserve fund, this option allows them to essentially self-insure the roof. They might decide that they are willing to cover the cost of a roof replacement from their own savings in exchange for a lower annual premium. This protects the rest of the church property, such as the stained glass windows and building contents, at full value. It shifts the specific risk of the roof to the church's savings, which can be a calculated risk management decision.
Three Negatives of a Roof Sublimit
While there are valid reasons to consider this option for church property insurance, the dangers are significant. Especially if you are caught unaware. For most churches in Texas, the negatives far outweigh the initial premium savings.
1. Massive Out-of-Pocket Exposure
This is the trap that caught the church in San Antonio. The sublimit creates a catastrophic gap between the cost of repairs and the insurance payout. If a hailstorm destroys a roof that costs $150,000 to replace, but the policy has a $50,000 sublimit, the church is responsible for the remaining $100,000. Many churches do not have that kind of cash reserve. This forces the church into crisis mode, requiring emergency loans or frantic fundraising campaigns just to keep the building dry.
2. It May Not Satisfy Lender Requirements
If your church has a mortgage, the bank has a say in your church property insurance. Lenders almost always require Full Replacement Cost coverage on the building to protect their collateral. A roof sublimit technically violates this requirement because it does not guarantee the funds to fully restore the building after a major loss. If the bank discovers this limitation, they can force-place insurance on the property, which is often far more expensive than a standard church insurance policy.
3. The Total Loss Trap
A sublimit often applies regardless of the severity of the damage. In a natural disaster that destroys the entire building, the sublimit can still cap the roof portion of the claim. This creates a complex and contentious claims process. You might get full value for the walls and pews, but the payout for the roof is capped at a fraction of its worth. This complicates the reconstruction process and leaves the church short on the total funds needed to rebuild.
The Failure of the Generalist Agent
The real tragedy in San Antonio was the failure of the agent to properly educate the church how their commercial property insurance worked.
Many insurance agents in Texas are generalists. They sell auto, home, and maybe some small business policies. They focus on price because that is the easiest thing to sell when you don't know what you are doing. When they see a quote with a low premium, they present it as a win. They celebrate the savings without educating your church finance committee or calculating the cost when that storm rolls in.
An experienced church insurance agent knows that a commercial TPO roof costs significantly more than a residential shingle roof. They know what replacement costs are in Texas.
A specialist would have looked at that San Antonio church and done the math. They would have realized their roof is a $150,000 asset. They would have looked at the $50,000 sublimit and explicitly told the committee that they were effectively self-insuring $100,000 of risk.
The inexperienced agent didn't do that. They let the committee sign the paper thinking they were fully protected. They left the church hanging. The committee thought they bought certainty. Instead, they bought a gamble. And they lost.
Certainty Requires Transparency
True certainty requires a church insurance agent who acts as an advisor, not a salesperson. You cannot make a good decision for your ministry if you don't have all the numbers. That's why we made True Texas Church Insurance.
You need a risk assessment that accurately values your roof before the storm hits. You need an agent who points out the negatives and helps you weigh the risk of a sublimit against the reality of your bank account.
If you have a sublimit, it should be because you chose it strategically, not because it was hidden in the fine print. Don't let a cheap premium cost you your building fund.
Click the button to get the right property policy for your church so that you can have The Promise of Certainty.