The changes going on with Texas church insurance are enough to make your head spin. Churches from all denominations and places on the spectrum are currently reeling from non-renewal notices, church insurance companies completely pulling out of the state, and changes to their terms of coverage for damage or claims. If you're reading this story, you likely have some first hand experience with this chaos. When Benjamin called our office recently, he was looking for answers to questions and the first one he had was about his policy deductibles. Especially his property deductible for hail damage.
Benjamin is part of his church's financial committee. His church is located up in the McKinney area which is prone to frequent and large hail storms year round. The volume of storms has allowed everyone to become aware of the complications that can come with property claims on buildings with ever increasing deductibles. When the committee was reviewing their renewal terms on their church insurance policy, they definitely noticed the dramatic increase in the annual premium that was at the top of the page. But as they began to scan the range of coverage amounts, one thing that caught Benjamin's eye was the section on deductibles. He noticed that the wind and hail deductible was 5% of his building coverage. That felt like a massive amount of money!
What Does A 5% Deductible Mean?
Benjamin's gut feeling was correct. His church property insurance had total building coverage listed at $2,545,000 for the 13,000 square foot building that they used for services, Sunday School, and the fellowship hall. Given that they had started in a house less than 20 years ago, they viewed their modest building as a symbol of how God was using them in their neighborhood. But the 5% deductible for the next hail storm that would force them to replace their roof meant that they would be out of pocket $127,250. That would be a massive portion of the replacement cost of the roof and would leave them in a bind when the cost of everything continues to skyrocket.
Benjamin, along with the other church leaders on the finance committee began to ask the question of what should a normal deductible be for church insurance claim. They did not remember the church insurance providers that they had used in the past requiring such a large deductible, and wondered what exactly had happened. The need for comprehensive coverage to make sure that their financial future wasn't at risk was also met with the reality of affordability. What were they supposed to do?
What Is A Insurance Deductible Buy Down?
Benjamin reached out to our office to see what our experienced church insurance agents could do to remedy this situation. We first spent time helping Benjamin understand what was happening with property coverage on insurance for churches in Texas. Unfortunately, the uptick in the frequency that hail claims occur has increased the risk for insurance companies covering large property exposures in Texas. Churches fall into this increased risk category which are requiring changes to specific types of coverage. Hail coverage being the exact one.
Benjamin discovered that although he used to have a 1% hail deductible, which he is used to, that the companies have all increased those values on renewal policies. With many of these companies moving the amount to 3% to 5% of the building coverage amount. This is done to attempt to slow down the frequency of claims made as spending the large amounts required will discourage roof claims being made. The companies are simply trying to get a handle on church insurance costs and regaining profitability for themselves. This is where experienced church insurance agencies can help provide solutions to Benjamin's church and others just like it.
A deductible buy down, or deductible buyback coverage, is a method of insurance in which you pay an extra premium to reduce the amount you would have to pay in a weather-related claim to a different insurance company. Essentially, it provided the ability for the church to reduce that 5% deductible down to as low as 1% if they desired. Benjamin felt like this was a solution that he could easily communicate to his finance committee and church body. This extra insurance policy to reduce deductibles is a way to help offset the costs of the increased property deductibles to minimize the the catastrophic financial risk that would come with the next major hailstorm. Benjamin didn't necessarily like the additional costs to add this policy, but it definitely offered a balance between immediate cost and financial protection for the long run. This approach gave Benjamin flexibility in choosing a deductible that was right for his church.
What Are The Requirements For Having A Deductible Buy Down For My Church Insurance Policy?
In order to qualify for a deductible buy down, specific requirements must be met. Your church property coverage should encompass your entire property and business personal property. The buy down policy must be obtained from the same church insurance agent who manages your other church property insurance. This is done to make sure that you have proper coverage while also being able to customize it to your church's risk management strategy. Gaps in coverage can have negative consequences for both you and the insurance providers. Benjamin understood this and was eager to have our agents work on his broad-form coverage for both the church's property and liability coverage.
Money Saving Strategy With Deductible Buyback Coverage
If you are struggling with the staggering increases in insurance premiums for your church, leveraging a deductible buyback as part of your church insurance program can be a way to find some relief from the increases. Having A higher hail deductible on your primary property policy can lead to a significant reduction in your church insurance costs. Moving your percentage deductible from 2% up to 5% can lead to substantial reduction of annual premiums. Assuming that the cost of the buy down policy is less than the decrease in the annual premiums, you can end up saving money and allowing your church leadership to look like heroes!
How Can I Get A Deductible Buy Down Policy?
Buying a deductible buyback policy for a Texas church, like Benjamin's, is a simple process. Contact a church insurance agent to discuss options, coverage details, and costs. The agent can help you find a policy that fits your needs and financial goals. Working with an experienced, independent agent can make a big difference in finding the right solution. Getting True Texas Church Insurance can help you sleep better at night knowing that your church insurance company is looking out for you.
Understanding Your Needs and Risks
Churches in Texas are at risk of hail storms, which can disrupt their operations. An experienced church insurance specialist can offer creative solutions to mitigate these risks while providing options for churches and their coverage. They will ensure that your church is adequately protected while keeping insurance costs contained. Their specialized knowledge in Texas church insurance can guide you to the best coverage options tailored to your unique needs. Benjamin understood and appreciated this approach.
Working With Insurance For Texans
Collaborating with Insurance For Texans can bring numerous benefits to your church. They provide personalized insurance coverage and expert protection from financial losses specific to Texas churches. The independent agents at Insurance For Texans are known for their dedication and experience in finding the best insurance solutions, particularly for churches like Benjamin's or yours so that you can have peace of mind even when storms roll in.
Click the Button Below to Learn How Deductible Buy Downs Can Protect Your Church from the Next Big Storm.