Church Building Insurance Coverage
One of the top things we discover when reviewing insurance policies is the church building insurance coverage being underinsured.
While we also see specific liability coverages either not included or underinsured, the lack of adequate property insurance can be devastating.
No one wants to believe their church will be destroyed in a fire. When you are looking to save money on your churches insurance program, the last thing you want to discover is your church doesn’t have enough insurance coverage.
It is essential to conduct regular insurance reviews to ensure your coverage is keeping up with inflationary trends.
How Is Church Building Insurance Coverage Calculated?
Working with church insurance brokers who specialize in church insurance is vital. Many insurance agents do not have the tools to calculate the replacement cost for a church correctly.
This is large since most insurance companies do not have the specialized software that includes “Church Building Insurance Coverage” as a rating factor. Most insurance companies will only allow the insurance agent to select a “low or high-rise building” or another general building type. Unfortunately, these buildings completely miss the mark.
Insurance companies specializing in churches provide specific software that allows your insurance agent to evaluate your church-building insurance coverage properly. Following are a few of the different categories that are included within the software program.
- Basic Church Building
- Average Church Building
- Elaborate Church Building
- Traditional Church Building
- Contemporary Church Building
- Contemporary High Church Building
- Contemporary Mansard Church Building
- Modern A-Frame Church Building
- Auditorium Type Church Building
- Narthex Church Building
- Church with Sunday School Classrooms
- Church Bell Tower
- Church Camp Dorms
- Church Camp Cabin
- Fellowship Hall
Depending on the specific type of church building being reviewed, the software will produce a different insurance coverage amount. Within each building type, your church insurance agent will also assess a quality score from 1-5 based on the building materials used.
The replacement cost estimator report will gather all the needed information about the building to include the specific location. The location of the church building will be a rating factor as it will calculate the local area labor cost as part of the evaluation.
What Happens If My Church Building Insurance Coverage Is Under-Insured?
There are several consequences churches can face if their property insurance is incorrectly calculated. The most obvious is your church will not have enough money to rebuild the same type and quality of a church building. This can mean your member will need to raise money and pray they can pull in the resources to rebuild.
To make matters worse, if your church building insurance coverage is underinsured, the language within your insurance policy will further penalize your coverage. This language is known as the coinsurance clause.
In short, if your church building needed to be insured for one million dollars but was only insured for five hundred thousand dollars, the insurance company will reduce the limits even further based on the coinsurance clause penalty.
This can mean your church may only have access to two hundred thousand dollars in coverage because of being underinsured.
These may seem like large differences in insured amounts; however, it is very common to find churches underinsured by 50% or more. The good news is our church insurance companies offer competitive pricing on their property and liability coverages.
How Should the Church Insurance Quote Process Work?
When you request an insurance quote that includes church building insurance coverage, you must obtain your complete insurance policy from your agent. Your new church insurance brokers should review your full policy to identify any evident and apparent issues that stand out.
Next, the church insurance agent should review your church properties to determine the types of buildings to be insured. Is your church building a 1930’s traditional church building or a modern stadium church building?
Thoroughly discuss all properties owned by the church with the insurance agent to ensure they correctly identify and rate each building. Once completed, request the insurance agent provide a copy of the replacement cost report to ensure you agree.
Any disagreements with how you believe the church building was rated should be discussed and changed if warranted.
It is also essential not to over-insure your church buildings. There is a balance in calculating the total cost of reconstruction of your church building.
Are Contents Include in Church Building Insurance Coverage?
Your church’s business personal property is a separate coverage outside building insurance. When you think about content coverage, think about all the stuff that can fall out of the church building if you were to shake it upside down.
When calculating content coverage, a good rule of thumb is to apply 18% of your building coverage toward your content’s coverage. This will ensure you are not always insuring your business’s personal property.
There are occasions where the 18% guideline may not be sufficient and times when this amount would provide excessive insurance.
For instance, a fellowship hall that only includes tables and chairs may not need 18% of the building value allocated toward the business’s personal property.
Your main church could have a highly sophisticated sound system, and 18% may not be enough to cover all your church’s business personal property.
We Are Your Church Insurance Experts
We have access to the best church insurance providers known for caring for churches. Your ministry insurance doesn’t need to be lacking in insurance coverage.
Not only can we help you with your churches building insurance, but We also offer church insurance coverage, including liability insurance for churches, workers’ compensation insurance, church van insurance, abuse and molestation insurance, directors and officers insurance, group health insurance, and more.
We have partnered with the best church insurance companies so your organization obtains the best coverage at the lowest price.
Request a Church Insurance Quote Today!