Who would ever think it would be important to protect your insurance program? After all, insurance is supposed to protect us, right? Isn’t that what insurance is for? Well, more and more churches and religious organizations are finding the market place is shrinking and that insurance carriers are becoming more demanding and even dropping policies when the church doesn’t comply with recommendations or when there is a high frequency of claims. Just since the start of 2017, we have received calls from nearly a dozen churches who were losing their coverage due to claims. Why all the changes?
Insurance companies are in business to make a profit . Even those who specialize in providing insurance for non-profit or religious organizations are only going to be in business as long as they continue to make a profit. Over the last decade, we have seen a number of insurance companies leave the marketplace, leaving far fewer options. Some companies left after they suffered heavy property losses due to bad weather. Others simply sold their unprofitable church “book of business” to another insurance company, while some chose to leave the states or region where the claims were the most severe. Some left after they paid large abuse settlements and decided they could no longer survive in the “church marketplace”. Many of those who remain, made major changes.
Many insurance companies now offer or require higher deductibles on property claims. Some place a percentage deductible on certain perils, such as wind or hail. Chances are, if you want coverage for an abuse claim, you will likely need to follow a series of safeguards to help prevent future abuse claims. Churches with vans or a fleet of vehicles are usually required to check driving records annually or put all drivers through a defensive driver program. The insurance industry is clearly putting more emphasis on the prevention of claims, especially for churches. And more changes are coming.
Why it is important
Lower/fewer claims equal lower premiums. When everyone works together to reduce losses, everyone benefits. When a church suffers a preventable loss, the insurance company may question the commitment by the organization and feel less loyalty to the church at renewal. Premiums can increase substantially or renewal coverage may not even be offered often leaving fewer and less favorable options to choose from.
What you can do about it
The most important thing you can do is work closely with your insurance broker and carrier to put all safety and risk management recommendations into practice. Every claim you prevent equals dollars saved and stress reduced. If you have ever experienced a significant claim, you know the anxiety that the loss brings and the costs involved. Prevention is the key.
It is equally important to train your staff and congregation on the importance of keeping everyone safe. Incorporate your safety program into the culture of your organization. Teach them what to look for and how to support each other in safety. Establish a policy that keeps your youth and adults safe. Create checklists to be reviewed prior to major activities. Establish a Safety Ministry and empower them to implement changes in how your organization functions.
Finally, review your program regularly and look for ways to improve it. Use the resources your carrier and broker have available to help you implement the best safety program. The carriers who focus on church insurance have fantastic programs to help you keep everyone safe and keep claims to a minimum. Plus most of these resources are free!
The team at Church Insurance Management is committed to helping you keep your church and congregation safe. Even if you are not yet a client, we can offer valuable resources to help you protect your church and grow your ministry. Please let us know how we can help you.