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Risk Management Minute

Valuable Information to Help You Protect Your Ministry

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Cutting Coverage to Cut Cost

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Cutting Coverage to Cut Cost

In this economy churches, like everyone else, are looking for ways to save money. Ministries approach us looking for ways to trim down their coverage in order to help their struggling budgets.  While we have written your policy with the coverages in place we feel are important and will best protect your ministry, we also understand sometimes you need to make some adjustments for a period of time. So the following are some suggestions for cutting costs.

1. Eliminate the Pastor’s Salary
2. Host Candlelight services to save on electricity
3. Suggest your members tithe twice a week

Just kidding. Although humorous I doubt these ideas are realistic!

1. Removing your Umbrella Coverage. Your umbrella provides an additional $1,000,000 of coverage that sits on top of your auto, general liability, and work comp. The average premium is between $500-$700 annually. While we feel this coverage is important to have in place, if you needed to save money for a time being you can remove this policy.

2. Removing Endorsements. Some carriers charge a premium for various endorsements to your policy while other carriers include them free of charge. Sometimes these endorsements elevate your policy from basic to superior coverage. Removing them will obviously decrease coverage and we would prefer to discuss with you to educate you on what coverage you will be losing prior to removal. Again, some carriers include these free of charge so there would be no savings and no reason to remove.

3. Parking Church Vehicles. If your ministry does not use your church vehicles on a regular basis you may consider parking them and removing coverage for a time being. This would eliminate premium on something that has minimal use. Just remember that they should not be driven at all without coverage in place.

Sometimes people call wanting to decrease the value of their building in order to cut cost. We do not recommend this course of action. On average, $100,000 of building value equals $150 of premium annually. If you under insure a building and have a claim, you will be faced with a co-insurance penalty. This means that you co-insure the loss to the same percentage that you under insured the building. While you may have saved $300 on your property premium, it will now cost you $70,196 in order to restore you building. 

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Having proper insurance in place is vital to your ministry. If you're late on your electric bill and they cut the power you can always have it turned back on. But if you have insufficient coverage when you have a claim, your ministry may not survive. If your ministry needs help with decreasing coverage for the time being, give us a call so we can properly advise you to make sure your still have adequate protections in place. 

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Welcome to our Risk Management Minute Blog! My name is Jessica and I joined the First Insurance Group team in 2008. I began working in the Church Division in 2009 and as part of my job began to learn about the specific needs Churches face in regards to Risk Management. We have made it our goal to not only supply you with relevant information, but to take the work out of risk management by creating forms for you to print and use. Have questions on a topic we have yet to cover? Let me know! I will gladly do the research and provide any information I can.

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