Church Insurance Claims Process
Church insurance claims can be made when a church believes their is an accident that may be covered by an insurance company. This accident can be related to church owned property, property of others, or an injury to an individual related to a church incident.
When an insurance claim is made against an insurance company, the church organization is requesting financial help and protection from the church insurance company for payment after they experiences a loss covered by their insurance policy.
For example, if a church building is damaged by a fire and the nonprofit organization has insurance, they will file a claim to begin the process of the insurance company paying for the repairs.
Depending on the type of claim, a claim can be settled within a few days and sometime they can take several years. We have heard of workers’ compensation insurance claims remaining open for 20 plus years. Most basic church insurance claims are settled within a few weeks or months.
Types Of Church Insurance Claims
There are several different types of church insurance claims a nonprofit organization may face for which they need to be prepared for. Depending on the type of loss that happens, can change our recommended approach and which insurance policy a church needs to file a claim against.
Church Property Insurance
Your church insurance policy may include coverage for your church buildings and business personal property. It provides coverage for the actual church buildings (main sanctuary, fellowship hall, classrooms, parsonages, gyms, and so on) and all of the contents within each of your properties.
Church property insurance may also include coverage for loss of use, codes and building upgrades, demolition, pollution cleanup, outdoor signs, fences, and additional building expenses. Church insurance claims related to property can add up to millions of dollars in losses.
If a church has multiple properties, it is recommended to obtain a blanket property limit. This will help provide an additional layer of protection during times of excessive inflation. As long as your property coverage were insured correctly, the church insurance company will allow for a pooling of property limits to rebuild a church building.
Property insurance coverage includes a lot of different layers of insurance coverages and are not as clear cut as many may believe.
Church Liability Insurance
Churches face a long list of liability exposures. It is important to have all of the needed church liability insurance in place to provide all of the needed protection. Liability insurance provides third liability insurance protection for a covered loss. An example of this is if someone becomes injured who on your church property.
Here is a list of liability insurance coverages churches needs to have in place to protect themselves from church insurance claims.
- General liability insurance
- Directors and officers insurance
- Pastoral liability insurance
- Abuse and molestation insurance
- Employment practice liability insurance
- Religious beliefs insurance coverage
Workers’ Compensation Insurance
Provides your employees with the needed protection in the event they experience a job related injury. All states require employers to provide workers’ compensation insurance coverage when they hire an employee. It is important a church seeks out immediate medical help when an employee becomes injured. The church will also need to complete a church insurance claims form detailing who, what, where, why, and when the accident happened. If the employees refuses medical treatment, the church needs to write up a report stating such.
Commercial Auto Insurance
Churches typically have two types of auto insurance coveages. One is for their church owned vehicles (passenger cars, 15 passenger vans, & buses) and the other is for none owned vehicles such as an employees vehicles being used on behalf of the church. Vehicles owned by the pastor which are not in the name of the church do not qualify as a church owned vehicle. The registration card must be in the legal name of the church to qualify as a church owned vehicle.
Church insurance claims can exceed the liability limits on the primary insurance policy. An umbrella policy provides an additional layer of liability protection over a churches liability exposures. This can include all listed insurance coverages above, with the exception of church property insurance.
It is important to ensure all liability policies are listed on the umbrella policy. When obtaining a standalone umbrella policy, it can be easy to miss a specific church insurance coverage. Church Insurance claims can be denied if the specific coverage is not included on the umbrella policy.
Church insurance companies will include specific exclusion on their policies. These exclusion can include an exclusion for abuse related incidents, directors, and officers insurance, and employment practice liability insurance. If a church is wanting their umbrella policy to extend over these lines of insurance, they may be required to obtain a standalone umbrella policy.
Property insurance is not covered by an umbrella policy as this is not a liability exposure.
When To File A Church Insurance Claim?
When a church believes they have a financial loss that may be covered by their insurance company, we always recommend contacting your church insurance brokers prior to actually filing church insurance claims.
Your church insurance agent will gather the information related to the loss and help guide you on your best course of action. Your insurance agent is not allowed to tell you not to file a claim, but they can tell a church if filing an insurance claim would be financially beneficial or not.
Should a church file a property claim?
The answer to this question is it depends on the size of the loss and the size of your insurance premium. Most policies will include a loss free discount. This discount can equal a 10% to 20% reduction in your annual premiums. In addition, you will have a deductible obligation. This is the portion of the loss you are responsible for, before the insurance company will contribute to the loss.
For example many churches have a $2,500 property deductible, and depending on your state, a church may have a much higher deductible that can equal tens of thousands of dollars such as Texas. Filing church insurance claims against the insurance company may have a negative impact, making it not worth it.
Let’s examine a possible claims scenario. The church has a property loss resulting in $6,500 in damages. When you contact your agent, they will ask what happened and what you believe the value of the loss will be (meaning how much money will it take to repair the church building or stolen property). If the church is spending $18,000 on their annual premium and they have a $2,500 deductible, will it be financially beneficial to file an insurance claim.
Assuming the church insurance claims free discount of 10% would be lost for the next 3 years, based on the annual premium, the premium would increase by $1,800 or $5,400 over the three year period. If this church filed the claim, the total cost would equal $7,900 ($5,400 plus $2,500 deductible). Filing this claim would end up costing the church $1,400 more than the actual claim paid out.
In this situation we would advise our client to not file a church insurance claim.
Should a church file a liability claim?
When it comes to a liability loss where someone has become injured and is requesting the church to take care of their medical bills, our answer is yes file a claim. Church insurance claims related to third party liability should always be filed against the insurance company. We still recommend calling your church insurance agent to discuss the situation.
When someone gets hurt on your property, your first response should NOT be, don’t worry we have insurance. Discussing insurance should only be brought up if the injured party brings it up to your church leadership. Most people who slip and fall, will simply get up and move on with their lives. There is no need to draw attention to your church insurance coverage.
Do I file a workers’ compensation claim?
When an employee becomes injured, it is important to assess what happened. We have seen even the smallest of injuries turn into large church insurance claims. While we don’t want to overreact we also don’t want to ignore the injured employee. It is important that the injury is well documented and that the employee is offered medical attention.
Call your insurance agent and discuss what happened to formulate a plan of action. Sometimes, it may be a sit back and wait and see plan and other times it may require immediate attention. In any event, the employee needs to know their options, and if they deny medical attention, please have them sign a form stating they were offered medical help but declined at this time.
Should you file an auto insurance claim?
How To File An Insurance Claim
Filing church insurance claims is a very straightforward process. However, as mentioned depending on the type of claim, they can take time to fully process. Following is a typical claims process.
- Obtain police report
- Document incident
- Assess the damages or injury
- Notify church insurance agency
- Review church insurance coverages
- Notify insurance company
- Make contact with insurance adjuster
- Provide any additional needed documentation
- Review settlement offer
- Receive payment and repair damages
Depending on the type of claim, can change the church insurance claims process, however this is generally how the process will flow. Remember to be patient and always reach out to your claims adjuster if you have questions. Your church insurance agent is also their to help facilitate any issues you feel are not being resolved with the insurance company.
Most insurance companies will include their claims contact information within the actual policy. Often times you can locate their phone number on the insurance companies website. They often times provide an online claims form a church can use to submit church insurance claims.
Can You Cancel An Insurance Claim
Church insurance claims can be cancelled after you have requested for insurance to provide the needed protection. It is possible the insurance company will not allow for the claim to be cancelled. There can be many reasons for requesting to cancel a claim, such as finding out it would not be financially beneficial or the stolen item was returned.
Whatever the reason, it is important to mention the claim will still show up on your loss runs as paid $0.00. This should not have a negative effect on your insurance premiums. Always discuss your thoughts with your board of directors and your church insurance agent, before making these types of decisions.
Church Insurance Claims Denied
No one ever wants to find out their insurance companies has denied coverage. A claims denial can mean your your nonprofit organization is now 100% responsible. No matter if this is for a property claim or liability claim, this can equal tens of thousands if not millions of dollars the church is now responsible for.
Why was your church insurance claims denied by the insurance company? The answer may be simple or not so simple.
We have seen instances where the church failed to maintain their property. This includes a roof that needed repair due to old age, that sprung a leak and caused damage. We have also seen rain gutters that were not cleaned which caused a blockage creating a pool of water left on a roof. Both of these cases the insurance company denied coverage for failure to maintain the church property.
Liability claims especially for churches can be denied coverage, because the church did not have the proper coverage in place. We see this happen when a church is insured with an insurance company who does not specialize in insurance for churches. As a result they do not offer the needed abuse and molestation insurance coverage, or religious beliefs coverage. As a result those types of claims are excluded.
Another instance of a denied liability claim, is when the church is insured with a company that puts to many restrictions on their liability coverage. If the church fails to comply with all of the restrictions, the insurance company can deny coverage.
Will The Insurance Company Cancel My Insurance If I File Church Insurance Claims
Insurance companies are in the business of making money. In most instances the church insurance company will not cancel your insurance coverage for filing a single insurance claim. Even if you file a major property loss for a fire, the insurance company will typically continue to write your churches insurance.
Where a church may open the door for being cancelled or nonrenewed, is when an organization files to many church insurance claims in a short amount of time. These claims do not need to be large in nature, just the frequency of claims can cause an insurance company to feel uncomfortable about continuing to offer insurance coverage.
While it could be a string of bad luck, it can also be a sign of the church experiencing financial difficulties. What they would once have taken care of on their own, they are now seeking financial help for all of their maintenance items. Because these maintenance items where not dealt with swiftly, they have now become a much bigger issue.
These bigger issues, have turned into church insurance claims that could have been prevented. Building maintenance is very important in the eyes of the insurance company. They want to see you have a pride of your church buildings.
If your insurance policy is being canceled make sure you talk with the church insurance agency you are with to see what options are available to the church. It is possible to reverse a cancellation, if the insurance company is simply looking for something to be fixed.
In this instance, simply providing proof a repair was completed is as simple as a picture and invoice paid to a contractor.
We Are Here To Help With Your Church Insurance
Integrity Now Insurance Brokers, has a passion for helping churches throughout the United States. Our church insurance specialist, have helped thousands of churches obtain the needed church insurance coverage.
If your church needs help figuring out the church insurance claims process, we have the experience you need on your team.
The owner is not only a church insurance agent, he has been involved in youth ministries for the 20 plus years as a Jr. High Pastor. He understands how churches operate, and knows the importance of saving money on church insurance without sacrificing coverage.
We look forward to hearing from you, please give us a call or complete our online quote form.