The finance team at a church in Waco had been through enough stress after their building was broken into. Thieves had taken expensive sound equipment, musical instruments, and computers from the church office. When they filed the insurance claim, they assumed their policy would cover everything.
When the claim for the property damage was processed, the payout was much lower than they expected. They had thousands of dollars in losses, but the check from the insurance company barely covered half of it. After a call to their agent, they learned about something they had never heard of before. Their policy had "sublimits" on certain types of losses.
It is not unusual for churches to learn about sublimits after they file a claim and have received a check that is much lower than expected. Understanding them ahead of time can help avoid surprises and emotional distress when something goes wrong.
A sublimit is a specified maximum on how much an insurance company will pay for certain types of claims whether that be for liability claims or coverage for property damage. Many churches believe their full property coverage amount applies to all types of losses, but that is not the case.
The Waco church had over a million dollars in property coverage. That made them think their stolen items would be covered in full for the theft. Instead, they found out their policy had a $10,000 sublimit on theft claims. That meant even though their losses were much higher, the insurance company would not pay beyond that amount.
Sublimits exist for different types of property and liability policies. Some of the most common sublimits in church insurance policies include theft, electronic equipment, stained glass windows, musical instruments, fine art, water damage, and ordinance and law coverage. Churches that do not check these limits ahead of time may find themselves paying for unexpected costs after a claim.
Not all sublimits are the same. Some policies limit the total payout for a specific type of claim. While others set a per-item cap for property. This per-item cap can affect how much a church can recover for individual losses.
The Waco church had a front row seat for both of these items affecting their claim. Their electronics coverage had a sublimit of $5,000 per item. That meant their stolen soundboard, which cost more than twice that amount, was only covered up to the policy limit. Even though their policy covered electronics and had a higher sublimit for theft in total, they ended up learning two very valuable lessons.
Churches need to check their policies to see where and how sublimits apply. Some policies limit how much they will pay in total for a type of loss. Others cap the amount per item. If you know that your expensive property may not be covered on a per item basis, it is important to investigate a separate policy known as inland marine coverage to be secure in them being covered.
Insurance companies use sublimits to manage how much they pay out on different types of claims. They set these limits to control their financial risk and avoid large losses on common claims like hail or water damage.
In recent years, sublimits have become more common. As property insurance has become more expensive, insurance companies have looked for ways to limit their exposure. That has led to tighter restrictions on certain types of claims.
The Waco church assumed their coverage would fully protect them. They only realized after the fact that their policy had restrictions on how much they could claim for specific items. Many churches find themselves in the same situation. They only discover their sublimits when a claim is denied or paid out for less than expected.
Insurance is meant to protect churches from major financial disasters, not everyday expenses. While it is frustrating to face sublimits, they exist to keep policies affordable and focused on large-scale losses.
Some churches have turned to Risk Purchasing Groups to lower their property insurance costs. These groups help churches save money by spreading risk across multiple organizations, locations, and insurance companies. However, these groups often use sublimits to keep their payouts manageable for non-catastrophic claims like large weather events. Churches considering these programs need to check the fine print so they know what is covered and where limits apply.
Understanding what a policy covers is the best way to avoid surprises. Churches should not assume their full property limit applies to every type of loss. They should ask questions, check for sublimits, and make sure their coverage fits their actual needs.
Many churches do not realize how sublimits impact their claims until it is too late. An experienced church insurance specialist can help explain these tricky policy limits before a claim ever happens. They can also look for ways to fill coverage gaps and avoid unnecessary financial risks.
True Texas Church Insurance is a program offered by Insurance For Texans that helps churches secure the right protection without hidden surprises. Our independent agents start by asking you questions to understand your unique needs and ministries. We then can help you secure the right coverage to know who has your back when you're on your back. If your church is looking for insurance, this program and our agents are here to help..
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