Much has been written and said about the problems with Texas church insurance during 2024. Insurance For Texans has spent much of the year detailing these issues and we have even been contacted by news outlets to gain a greater understanding of what we are seeing in the marketplace. We published a brief overview of what to expect in 2025 last week, and wanted to expand on the three main trends in that article.
Hailstorms are always on the mind of Texans no matter the time of year. Our unique geography allows for convective storms to spring up during any season of the year. Those convective storms bring damaging winds, large hail, and tornadoes when the conditions involve clashing weather systems.
Whether you are a small church in Abilene or a large church in Dallas, the worry of what happens to the roof when a big hailstorm rolls in is real. Filing a claim is the wrong time to learn your insurance doesn't cover everything as expected. Sky high deductibles and older roofs leave coverage gaps that make the payout was way less than needed to fix all of the issues. Churches are left scrambling to come up with the money to complete repairs.
This has been happening to many churches across Texas and is picking up steam as we head into 2025. Insurance premiums are rising, policies are changing, and more exclusions or restrictions on coverage are popping up. Here’s what you need to know about common problems and how to protect your church in 2025.
Why Exclusions and Gaps Are Happening
Insurance companies are paying more claims with higher claim costs than ever. Texas has been hit hard by weather disasters like hailstorms and big storms with strong winds. Construction costs for repairs or rebuilding have gone up because of inflation. We can all understand that. To protect themselves from these ever increasing cost of claims, insurance companies are trying to limit what they cover or shifting the cost sharing of this process with higher deductibles.
For churches with large roof lines and expanded square footage, this means that some risks may have new rules or even be excluded from coverage altogether. Without knowing what’s in your policy, you might find out too late that you’re not adequately protected for common claims like hailstorms and water damage.
Common Exclusions and Gaps
Hail damage is by far the most common claim that Texas churches face. But it is not the only claim that churches will file. And the changes to policies extend beyond restrictions on coverage for hail. There are three key areas that current coverage is being changed as renewals are issued.
Hail Damage Limitations
Most policies now have higher percentage deductibles for hail claims. This trend has been in process over the last five to ten years. For example, if your policy now has a 3% hail deductible on a $1 million building, you would have to pay $30,000 before the insurance pays anything. That is a big difference between the flat dollar deductibles that churches used to enjoy.
Coverage limits get even more problematic for churches with older roofs. Many policies now only pay actual cash value (ACV) instead of replacement cost for roofs that are over ten or fifteen years old. This means they pay what the roof is worth today, after wear and tear, not what it would cost to replace it. For older roofs, that can leave a big gap in what you need to fix the damage.
What You Can Do: Work with an insurance specialist to check if your roof is covered under replacement cost or ACV. If needed, ask about adding endorsements or deductible buy-down policies for hail damage.
Water Damage Limitations
Water damage is usually the second most frequent claim from Texas churches. The "big freeze" that we experienced in 2021 has prompted the insurance carriers to add additional restrictions on coverage. Burst pipes, HVAC failures, and water backup may not be fully covered under your policy if coverage limitations have been applied. Some policies cap the amount they’ll pay or exclude it altogether unless you’ve added special coverage.
If a sewer pipe backs up and floods your church, your policy might only cover cleanup if you’ve added a water backup endorsement. Make sure that your forms of coverage are adequate or you’re left covering the costs yourself.
What You Can Do: Confirm with your church insurance agent that your current coverage provides water protection to repair your property. Also, regular maintenance of plumbing and HVAC systems can also help prevent costly damage.
Some Liability Issues Require Separate Endorsements
Sexual misconduct problems in churches seems to be a regular news stories these days. A coverage gap that many churches are not aware of stems from these stories. Sexual misconduct liability is not included in most general liability policies. You have to add it as a separate endorsement. This coverage helps with legal costs and settlements if someone files a claim related to abuse or misconduct involving your staff or volunteers.
These types of claims can be devastating, even if they’re not true. Legal fees alone can drain a church’s budget. You need to understand how your policy works for these claims along with pastoral counseling, special events, and employee accidents.
What You Can Do: Work with a church insurance specialist to add these special coverage for liability needs to your policy based on ministries and activities that your church provides. These coverage gaps are too important to leave out. Especially in today’s litigious world.
How to Find and Fix Gaps in Coverage
The single biggest thing you can do is to go over your policy with your agent every year. Look for new exclusions or limitations that may have been added during renewal. Pay special attention to areas like hail damage, water damage, and liability risks.
An experienced church insurance specialist understands the risks Texas churches face. They can help you find options like endorsements for hail damage, water backup, and abuse liability coverage. They also know how to explain policies in a way that’s easy to understand.
Invest in Risk Management
Taking care of your property can lower your risk of filing claims. Inspect your roof regularly, fix plumbing issues quickly, and train your staff on best practices for safety and accountability. Preventing problems can save your church money and headaches in the long run.
Protecting Your Church in 2025
The challenges for Texas churches are real, but you don’t have to face them alone. By understanding the gaps in your coverage and working with someone who knows how to fix them, you can protect your church and its mission.
True Texas Church Insurance, offered only by Insurance For Texans, helps churches address exclusions and gaps with solutions that work for their unique needs. Our team has helped churches all across Texas prepare for risks and protect their ministries. They are masters at finding a customized solution that provides access to coverage you need.
Click the button below to connect with a church insurance specialist. Let’s make sure your church is ready for 2025 and beyond.