This is the second of a two part series about what to expect for Texas Church Insurance in 2026. You can find part one here.
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Phil is back in the library in Tyler. The finance committee meeting is in full swing. The mood is significantly lighter than when we last left him talking to his insurance agent about their Texas church insurance policy.
The finance committee members were gathered and all were hopeful that they could recalibrate their budget with some good news. Mark, a fellow committee member, had brought it an additional quote for property insurance he had gotten online.
Phil puts on his reading glasses to look through the religious package policy. He scans the bottom line. His eyebrows shoot up. The premium is thousands of dollars cheaper than even the optimistic numbers Phil had crunched. It is suspiciously cheap.
But Phil hesitates. He remembers something his dad used to tell him. If it looks too good to be true, it’s probably a trap.
"Hold on," Phil says. "Let's look at the roof coverage. We get too many storms to make a mistake with our property size. A bad claim could ruin us."
He flips through the forty page proposal and sees fairly typical policy limits. He scans past the liability coverage limits to find the commercial property insurance values. Finally, on page thirty two, he finds a single sentence buried there.
Roof Surfacing Loss Limit: $25,000.
Phil freezes. Their sanctuary roof is just over 15,000 square feet. A replacement would cost at least $150,000.
"This policy only pays twenty five thousand dollars if hail destroys the roof" Phil says quietly.
The room goes silent. The smiles fade.
The realization of commercial property coverage that wouldn't cover a quarter of their roof hit hard. The proposed policy from an online "specialist for churches and religious organizations" wasn't cheaper if they actually needed to use their policy. It was actually a lot more expensive than effective insurance for churches.
The Danger of a Softening Church Insurance Market
The situation Phil and his team of church leaders faced is the biggest danger churches will face in 2026.
As the market thaws and competition returns, we are seeing a flood of "cheap" products entering Texas. Aggressive carriers and inexperienced church insurance agents are trying to buy market share. They know you are exhausted from years of rate hikes. They know you are desperate for relief. And they were nowhere to be found the last few years when times were tough.
So they dangle an annual premium that looks like a miracle.
But insurance is a math problem. You cannot offer an actual premium that is mathematically too low to cover the risk unless you shift the risk from the policy back over to Texas churches.
These carriers achieve their low average cost by gutting the liability and commercial property procoverage. They use precision engineered limitations and exclusions to strip away the protection you need most. "Affordable" is good, but only if the policy actually pays the claim.
Here are the three specific traps you need to watch for in 2026.
1. Substandard Coverage: The Roof Sublimit Trap
This is the exact trap Phil found. It is the most common way carriers are lowering premiums this year.
On the main property insurance declarations, the policy looks fine. It lists your building value at $2 million. It lists your deductible at a reasonable amount. You think you are fully covered.
But the "Roof Sublimit" provision creates the problem for property damage from a hail storm. It places a hard cap on how much the insurance company will pay your Texas church for damage to the roof surfacing caused by wind or hail.
Phil knew that hail is not an if. It is a when. That is just how it is for Texas churches.
If you have a $50,000 sublimit and a storm destroys your roof, the math is brutal. The replacement cost is $200,000. The carrier pays $50,000. You pay $150,000 in spit of what your commercial property insurance deductible is for the policy.
Many churches do not have that kind of liquidity. Phil's church certainly didn't. This turns a covered loss into a financial crisis that requires emergency loans or capital campaigns just to keep the building dry. Do not trade a slightly lower monthly bill for a six figure liability.
2. The Fine Print: Limitations & Exclusions
The second trap is more evil because it is less obvious than a sublimit. In business insurance, which is what Texas church insurance really is, there is fine print.
This fine print in your policy can dramatically change how your policy covers natural disasters, settles claim payments, and handles liability costs. Here are two specific examples of where Texas churches are tripped up in their property and liability insurance.
1. The Payment Schedule
Carriers are moving away from "Replacement Cost" for older roofs. Instead, they are attaching "Actual Cash Value" using the words "Roof Payment Schedules." This means they depreciate the value of your roof based on its age.
If your roof is fifteen years old, the schedule might say the carrier only owes you 30% of the replacement cost. You are responsible for the other sixty percent. Again, you are self insuring the majority of the risk.
2. The "No Retro Date Coverage" Gap
This one is a legal nightmare. Most liability insurance policies for Texas churches are "Occurrence" forms, which provide protection as long as the policy is in force with the same insurance company. But a new carrier attaches a condition stating they will not cover any claims arising from acts that happened before the policy start date.
Experienced Texas Church insurance agents will do some extra work to bridge this gap if you can prove you had continuous coverage. This is known as the "retro date". We are seeing new policies that do not do this.
This means if a child was abused in the nursery three years ago but comes forward today, this new policy will deny the claim because the act happened before you signed the contract. It effectively deletes your liability history. It wipes your hands clean of the past, leaving you exposed to lawsuits that should have been covered. Here is a short list of liability insurance types that are potentially effected by this.
- Pastoral Counseling or Professional Liability Insurance
- Abuse & Molestation Insurance
- Directors & Officers Insurance
Finance committees all across Texas have no idea this is even possible. But it is happening everywhere as churches look for ways to lower the costs of this specialized business insurance.
3. Elimination of Choice: The Managed Repair Mandate
The final trap is about control. And your church will have none.
Some carriers offer a discount if you agree to "Managed Repair" plans. In plain English, this means you fully surrender the right to choose who fixes your church.
You cannot hire the deacon in your church who owns a construction company. You cannot hire the local roofer that has provided all the work through the years. You must use the insurance company's preferred vendor.
This vendor works for the insurance company, not you. Their goal is to fix the damage as cheaply as possible to save the carrier money.
You might save a few dollars on your annual premium. But you pay for it with a complete lack of control. Since you don't know their contractors, you risk shoddy workmanship. They may cut corners. They may use materials that don't match your existing building.
You are the property owner. You should decide who swings the hammer. When Phil learned this was possible, he was floored. He knew this was a deal breaker for his church.
The Promise of Certainty
The congregation size doesn't matter, we are all looking for better pricing and terms on insurance for churches. Fortunately, Phil is a true leader for his church. He has worked with an experienced church insurance agent who didn't run or dodge phone calls the last three years.
That experience is carrying over into 2026. As the market is softening and giant insurance companies are using tricks to make premiums look good, you need a guide. You need a "Teacher" who will explain the fine print before you sign the check.
At Insurance For Texans, we audit these cheap quotes every day. We show you exactly what has been stripped out. True Texas Church Insurance helps you find sustainable savings, not hollow ones. We believe you should buy a policy that actually protects the church, community activities, and community programs.
Don't let a cheap rate bait you into a trap. Let us help you navigate the new market with eyes wide open.
Click the button to get the right property policy for your church so that you can have The Promise of Certainty.