After a major hailstorm left his Frisco church with a damaged roof, Charles was frustrated to discover just how high the deductible was on the church's commercial property policy. When Charles became the church’s finance leader, he inherited an insurance policy that was bought last minute as their previous church insurance provider had non-renewed them. Their options for comprehensive coverage were limited and the prices felt outrageous, but finding building coverage had to be done.
Like many Texas churches, his church had seen premiums rise over the years. The national average for church property insurance has increased steadily, while the deductibles for damage have also grown. Searching for a way to reduce these out-of-pocket costs in future storms, Charles began his search for options. This is how he learned about a somewhat lesser-known option called a deductible buy down. Here’s how buy downs can help churches facing similar dilemmas.
What is a Deductible Buy Down For Churches?
A deductible buy down (or buyback) is an additional insurance policy that allows a church pay a small additional premium to lower its out-of-pocket deductible costs for specific claims, like wind or hail damage. In Charles’s case, his hail deductible was set at 5% of his property’s insured value. Some quick math on a $1,000,000 building shows that the deductible for a roof claim would be $50,000. This would be a significant chunk of money which would be a significant financial hit after a storm.
With a deductible buy down policy, Charles could lower this percentage from 5% to 2% or 1% which would be much more manageable for his church. Being able to ease the financial burden his church would face in the event of a storm claim sounded like a solid plan. Deductible buy downs are becoming increasingly popular among Texas churches as deductibles on standard property policies continue to rise. Especially in hail prone areas like the coast or North Texas.
Why Should Texas Churches Consider a Deductible Buy Down?
A deductible buy down provides a valuable safety net for Texas churches, especially in hail-prone areas. For Charles, reducing the deductible made his church’s finances more predictable and stable in the face of unpredictable weather patterns producing more and more hail storms and tornadoes. Texas churches face frequent wind and hailstorms, which can lead to costly repairs. By opting for a deductible buy down, churches can minimize out-of-pocket costs, avoiding large, unexpected expenses after a storm.
Additionally, a hail deductible buy down lets churches control their costs without compromising on needed protection. Charles found this solution especially appealing as it helped balance his church’s premium payments with the potential costs of future repairs, giving him peace of mind that his congregation was covered without straining their budget.
When is a Deductible Buy Down Recommended?
For Texas churches, considering a deductible buy down is especially worthwhile when the weather-related deductible on a property policy exceeds 1%. In North Texas, where hail claims are frequent, a deductible exceeding 3% often makes the buy down option not only affordable but sensible. Charles noticed that flat deductibles were no longer offered on many policies, with percentages creeping up to 5% or even higher. By discussing deductible buy downs with his agent, he could reduce his church’s risk of high expenses following a storm.
Requirements for Obtaining a Deductible Buy Down
To get a deductible buy down, a church must have comprehensive property insurance that includes all buildings and contents. Additionally, the buy down is usually provided by the same insurance agent who manages the primary property policy to prevent gaps in coverage. Charles’s insurance agent confirmed that the policy periods for his property insurance and deductible buy down needed to align to ensure continuous protection. He also learned that each insurer might impose specific restrictions, especially in hail-prone Texas, which meant working with a specialist knowledgeable in church insurance was crucial.
Considerations and Limitations of Deductible Buy Downs
While deductible buy downs offer significant benefits, they come with limitations. For churches like Charles’s, which carry high wind or hail deductibles, a buy down can reduce costs in the event of a claim. However, insurers often restrict these policies in high-risk areas, and the buy down policy may not cover other types of insurance, such as liability. Charles’s church had to carefully assess the cost of the buy down against the premium savings and potential out-of-pocket costs for each type of claim that they might face.
How to Obtain a Deductible Buy Down for Your Texas Church
For Charles, getting a deductible buy down was as simple as reaching out to his insurance agent and discussing coverage options. His experienced church insurance specialist helped Charles navigate the details, identify the best deductible limits, and secure coverage that matched the church’s budget and protection needs. Finding the right buy down option allowed Charles’s church to retain financial stability, even after a hailstorm.
Work with Insurance For Texans
At Insurance For Texans, we understand the unique risks Texas churches face. Our True Texas Church Insurance program is specifically designed to help churches manage deductibles, customize policies, and find creative solutions for minimizing weather-related risks. We work with churches like Charles’s to secure coverage that reduces financial vulnerability while keeping costs manageable.
Click the button below to learn how deductible buy downs can protect your church’s future. With Insurance For Texans, you’ll get the guidance and expertise needed to make the right insurance decisions for your congregation.