Kevin is a pastor of a small church outside of Waco who is faced with a dilemma that is testing not only his faith, but that of his church leaders as well. The insurance coverage for the church is up for renewal . Over the last several years, Texans everywhere have seen the insurance companies push prices up on all policies. But churches, especially in smaller towns, have been decimated by the flood of rate increases that have come from the many weather claims that have been filed by congregations. Many church buildings have large roofs which make hail damage claims larger than they might be on other commercial property claims.
Kevin's church congregation did not have any claims history as they had been spared from the storms that often race across the North Texas landscape. But that didn't keep them from the financial damage that has come from the price increases being pushed by the church insurance companies. Fortunately for them, they had not been faced with a non-renewal like many churches had faced. However, the additional cost in premiums was putting enough pressure on the church budget that they were considering lowering coverage amounts on everything but building coverage. Does this sound familiar? This is not what we like to think of as a win-win situation. Let's take a look at what churches need to consider about coverage for damage to their property and maintaining proper coverage for other liability coverage types like pastoral counseling on their church insurance policy.
Church Property Insurance
When it comes to church property insurance, understanding the type of coverage needed is paramount. Churches require a unique blend of liability and property coverage to fully protect their premises, congregations, and operations. While you may not think of a religious organization needing a "Business Owners Policy", being a nonprofit organization allows church insurance providers to often combines both general liability and property insurance on a BOP. This is significant because it can provide a cost-effective solution for church insurance plans.
To properly cover your church against claims, you also need to understand that liability coverage is essential. Liability will protect the church from claims involving bodily injury, property damage, and more. Meanwhile, property coverage safeguards against physical damage to the church itself and its contents. Given the current climate, understanding the specifics of what these policies cover, from the type of insurance to the coverage amount, is important for church administrators. But even if you don't understand what broad-form coverage is on a church insurance policy, a great advisor can help you navigate the property insurance marketplace in Texas that has become increasingly challenging.
Factors Affecting Property Insurance For Texas Churches
In all parts of Texas and even beyond our borders, several factors influence property insurance for churches. While most love to talk about the effect of weather on the endless rate increases that we have seen over the last fifteen years, there are basic factors that we have to tackle as well before we talk about competitive rates. At its most basic level, the square footage of your church building, its year of construction, any recent renovations help determine the cost of replacement in the event of a total loss. Along with this, the presence of valuable items like musical instruments and office equipment can play a role in determining the insurance coverage needed. These factors aren't just numbers on a paper; they tell the story of the church, its history, its community, and its significance.
When you consider the liability insurance that your church will need, it is important to think about all that your church provides in the community. Those special events that draw folks onto your property introduce bigger potential for accidents. If you're running childcare in the form of a nursery, mother's day out, daycare, or preschool, you will need to consider extra liability policies for those specific needs. If you employ people, there is employment practices liability coverage. And the list can go on. But let's focus our attention on the items that make affordable church property coverage.
Size and Value of the Property
The size and value of church property are critical in determining the right insurance coverage. We already mentioned how square footage and renovations can affect the replacement construction cost of your property. Appraisals can also help establish that replacement cost if needed while determining the building replacement cost limit for your policy. And all of this is done to ensure that the church can be rebuilt or repaired to its former glory in the event of a disaster.
Location of the Property
The location of a church affects its insurance needs significantly. Factors such as the ease of access to the building, potential risks or hazards associated with its location, and any historical significance it may hold, are all considerations that insurers take into account. For churches in older buildings, concerns about outdated infrastructure or toxic construction materials can further complicate insurance matters. This can have a profound effect on both the insurance premiums as well as your out of pocket costs through deductibles.
Age And Condition Of The Building And Roof
The age of the church building and its roof, along with any renovations or repairs made, are pivotal in assessing its condition and insurance needs. Older buildings are more susceptible to having damage claims simply due to the wear and tear on the structure. This is compounded by outdated materials and techniques used in its construction. As a result, these are key factors that insurers evaluate when determining coverage options and costs for both businesses and religious organizations.
What is Total Insurable Value?
The items that we've mentioned so far like size, location, and age of the building are usually pretty easy for churches to understand. But let's discuss the Total Insurable Value (TIV) of your church. This is a concept that encompasses the total value of the property that will be covered under your church insurance policy. Calculating TIV involves considering replacement cost of all your buildings to ensure that the church is adequately insured against all possible contingencies. For a type of loss. This number has become a key factor of risk for insurance companies when looking at churches. Let's see why.
Why Obtaining Property Insurance For Churches Is Difficult In Texas
Over the last five years specifically, many reputable church insurance companies have experienced large property losses resulting from church insurance claims. As these claims have mounted, many of these companies have tightened underwriting standards, changed terms of coverage for damage, and have drastically increased the cost of insurance. You have likely felt this pain just like Kevin and his congregation in North Texas. This is due to a variety of factors, including hail exposure and large weather losses from events like hurricanes and winter storms.
Hail Exposure
Hail exposure in Texas is not a surprise to anyone who has lived here for any length of time. Having two hail seasons necessitates specific measures to mitigate potential damage to the large surface area of church roofs. Large hail events happen during all times of year, and as church buildings have grown in size the claims have gotten larger and larger. This type of coverage has paid out large amounts to many churches.
Large Weather Losses
Dealing with hail is to be expected, but the size of storms are leading to large weather losses. These large scale storms are affecting more churches in more locations which have turned those large roof claims into major catastrophe events from an insurance standpoint. As a result, church insurance companies have been making changes to their policies through their claims process and requirements to insure property. This is to make sure that they are accounting for hail, wind, hurricane damage, and other weather-related losses that have picked up in size and frequency around the state.
Does This Affect Smaller Churches The Same Way?
The rising costs of insurance and inflation in Texas are affecting both small and large churches. However, if you are a smaller church you may find it somewhat easier to secure property insurance. We are seeing a trend from the companies that they are willing to look closely at your proposal if the total insurable value of the church property is below $3,000,000. This magic number can open up more markets and potentially lead to lower pricing for coverage. This means that the overwhelming majority of all churches in Texas can still find proper coverage for their property and liability for their church! This is a critical consideration if your small church is looking to protect their property without overextending their budgets.
While you may not agree with defining what constitutes a small or large church for insurance purposes, you can breathe a sigh of relief knowing that coverage can be found. Now, don't forget that a good agent is also going to look into the scope of events and activities it hosts to make sure that the various types of insurance coverage that you need are included in your church insurance program.
Who Can Help Me Get Coverage?
For Texas churches, navigating the complex world of property insurance requires expertise and guidance. Working with an independent insurance agent who specializes in church insurance, like those at Insurance For Texans, can be invaluable. These professionals offer customized solutions and insights into the best coverage options available, ensuring churches can focus on their spiritual mission, secure in the knowledge that their property is well protected.
In the spirit of Kevin's journey in Waco, and for all Texas churches facing similar challenges, TRUE Texas Church Insurance stands as a beacon of hope. With comprehensive coverage options tailored to the unique needs of each church, we ensure that your sacred spaces remain shielded against the unforeseen.
Click The Button Below To Cover Your Texas Church's Property is With True Texas Church Insurance.