Best Practices for Managing Your Church Property Insurance Policies

Discover The Best Practices for Managing Your Church Insurance Coverage

Church property insurance is vital for any congregation, large or small. It protects the physical assets of the church in the event of damage or destruction.


While churches are not legally required to carry property insurance, most lending institutions will not provide a loan to a church without proof of adequate coverage.


There are a few best practices that every church should follow when it comes to managing its property insurance policies.

How to Manage Your Church's Property Insurance Policies?

Step 1: Identify your church property insurance needs

To identify the need for church property insurance, church leaders must understand their property’s risks and potential liabilities. It is important to note that some insurance companies have exclusions, so church leaders must confirm that their policy covers their activities.


Church building insurance coverage must be provided on the replacement cost value of each building to ensure the policy will pay to fully rebuild without factoring in depreciation costs.


Step 2: Verify all buildings are included in the schedule of properties

Church insurance policies will consist of a page that provides a list of addresses and property descriptions identifying the real property being insured along with the insurance replacement cost value of the buildings. 


Ensure you can locate each building that needs insurance protection, including the sanctuary, fellowship hall, classrooms, bell tower, gym, parsonage, and storage facilities on the church property. 


Step 3: Request an updated replacement cost property valuation from your church insurance agent annually

To request an updated replacement cost property valuation from your church insurance agent annually, follow these steps:


  1. Gather the necessary information about your church building, including its age, type of construction, occupancy, protection, and exposure.
  2. Contact your insurance agent and explain that you want to update your replacement cost property valuation.
  3. Request an estimate of the building’s replacement cost from your insurance agent. Many insurance companies will offer software that can provide a free, accurate replacement cost estimate.
  4. If you require a more detailed valuation, you can request a formal appraisal from an appraisal company. Be aware that this will cost between $1,000 and $5,000, depending on the size of the facility and the number of buildings.
  5. Ask your insurance agent to review your current policy and ensure the estimated replacement cost is correctly reflected.
  6. Finally, update your church’s property valuation annually to ensure you only pay for the necessary coverage.


Step 4: Increase building coverages to keep up with rising inflation

Once all aspects of your property have been reevaluated, request the agent to increase the building coverage accordingly. While this will increase your insurance premiums, your buildings will now be fully protected from damage to the property in the event of a fire.


Insurance policies include a coinsurance clause that requires churches to maintain adequate insurance coverage, or else they will be penalized for the amount they are underinsured when a loss occurs.  


Step 5: Adjust church building insurance deductibles as needed

Adjusting church-building insurance deductibles can help manage property insurance premiums for your church by letting you tailor your choices to fit the best financial situation for your organization. Increasing your deductible can save money on premiums and divert those funds to build a robust financial reserve for any potential claims. 

Review Church Liability Insurance Coverages Annually?

Review Church Liability Insurance Coverages Annually?

Check General Liability Insurance Coverage Limits

General liability insurance companies specializing in insurance for churches may offer a couple of insurance limit options. Church Mutual and GuideOne Insurance offer liability insurance policies that include one million dollars in coverage and may allow a church to increase the primary liability limit to two million dollars for each occurrence.  


This increased coverage may only cost a hundred dollars annually to bump your general liability insurance. This is money well spent, considering the gain in liability protection.


Verify and Increase Abuse and Molestation Coverage Limits as your Church Membership Grows

Religious organizations work around people of all ages, and it is essential to obtain sexual misconduct insurance for your nonprofit. As your place of worship adds new church members, churches must consider increasing their insurance limits to one million dollars.


Ensure Directors’ and Officers’ Insurance is Included

Directors’ and officers’ insurance can help protect churches from lawsuits arising from the actions or inactions of their leaders. This type of insurance covers legal defense costs, settlements, judgments, and other costs associated with legal issues. D&O Insurance protects board members from personal liability, and many church leaders will not join a board of directors without this needed coverage.


Add Religious Expression Liability Insurance if missing

Religious expression insurance is a new liability insurance for churches that provides a house of worship coverage for their religious beliefs. Before 2020 no church insurance program specifically covered this type of risk exposure.  


A church may add $1,000,000 in insurance protection for about $100 in annual premiums.


Review Employment Practice Liability Coverage Amounts (EPLI)

It is vital to review church liability insurance coverage amounts for employment practices liability often to ensure that the church is adequately protected. These policies protect churches and cover specific employment-related claims, such as wrongful dismissal and some forms of sexual harassment.  


EPLI can be added to a commercial package policy by a required special endorsement or a standalone policy.  


Complete Workers’ Comp Insurance Payroll Audit Statements

A Workers’ Comp Payroll Audit Statement is important to ensure that a business complies with all applicable Workers’ Compensation laws. Completing this audit statement can help ensure that a ministry appropriately protects its employees and volunteers and helps reduce the risk of financial losses due to employee injury.


Here is a step-by-step guide on how to complete a Workers’ Comp Payroll Audit Statement:


  1. Gather all relevant payroll information, including employee wages, hours worked, payroll records, workers’ comp insurance policy details, and other relevant documents.
  2. Calculate the total payroll costs for the past year, including wages, benefits, and taxes.
  3. Calculate the total Workers’ Comp insurance premiums paid for the past year.
  4. Compare the payroll costs to the Workers’ Comp premiums to ensure the correct amount was paid.
  5. If there is a discrepancy between the two totals, it is crucial to determine where the difference is and make any necessary adjustments.
  6. Complete the audit statement, including all necessary information, such as employee and payroll details, and attach all relevant documents.
  7. Submit the completed Workers’ Comp Payroll Audit Statement to the relevant insurance provider.


Frequent asked questions faq

What kind of insurance should a church have?


Churches need specialized insurance protection, which includes coverage of the following:



What are the three main types of property insurance coverage? 


Commercial property insurance coverage is an essential investment for businesses of all sizes. It protects against physical losses due to fire, theft, vandalism, and other types of damage.


There are three main types of commercial property insurance coverage: Property Damage Coverage, Business Interruption Coverage, and Liability Coverage.


  1. Property Damage Coverage compensates for losses due to fire, theft, vandalism, or other unexpected events.
  2. Business Interruption Coverage helps protect against lost income if your business must be closed or disrupted due to a covered event.
  3. Liability Coverage protects against lawsuits or claims from injury or damage caused by your business activities. 


How does church insurance work for religious organizations?


Church insurance is a policy designed to protect religious organizations from potential financial losses. It typically covers property damage, liability, and other financial risks associated with owning and operating a church.


The coverage may include protection from natural disasters like hurricanes, earthquakes, and floods; liability for the care of members and visitors; and protection for activities like retreats or mission trips. In addition, some policies provide coverage for loss of income due to certain events like cancellations or reduced attendance due to a covered cause of loss, such as a fire. 


Church insurance might also cover legal costs related to clerical errors or negligence while providing spiritual services or advice. Reviewing the policy carefully with one of our church insurance agents to ensure it meets the organization’s needs is essential.


Why is church insurance so expensive to buy?


Church insurance is often more expensive than other types of insurance because it covers a multitude of insurance coverages, including liability and property damage. Many churches are also vacant 5 to 6 days a week, which increases the chances of significant property loss due to water leaks.


Do Church Insurers Cover Vandalism?


Church insurers typically cover vandalism that occurs on the premises of a church. Vandalism includes damage to property and buildings, such as graffiti, breaking windows, and theft. The church property insurance coverage usually includes replacement costs coverage for items damaged by vandalism. 


My buildings are older am I able to buy old church insurance?


Church insurance companies will consider older church buildings as long as they are being maintained and updated. This means the roof, electrical system, heating and air conditioner, and plumbing system are replaced with new modern materials.  


Do church insurance providers offer insurance for small churches?


Yes, church insurance providers typically offer a range of insurance coverage for small churches. These plans usually cover property and liability protection, such as protection against damage to the building and its contents, lawsuits related to the church’s activities, or injury to members or visitors on church grounds. 

Contact Our Church Insurance Agency for Help: Integrity Now Insurance Brokers

Integrity: Insurance Brokers bring high integrity to the church property insurance management process. Our church insurance agents have extensive knowledge of church insurance needs, and they understand the unique risks associated with religious organizations.


We are committed to finding the best church insurance coverage for each church’s particular situation and providing the most cost-effective and comprehensive solutions. 

As your church insurance agency, we work hard to ensure churches receive all the discounts and other savings they may be eligible for. Integrity Now Insurance Brokers understand the importance of protecting the church, its members, and its assets.


By taking a proactive approach to church insurance, Integrity Now Insurance Brokers helps churches better protect their members and financial stability.


Contact us today and request a liability policy with the additional coverage you require.

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