Florida churches see increases in property, casualty insurance costs in 2006

e-Review Florida United Methodist News Service

Florida churches see increases in property, casualty insurance costs in 2006

Dec. 22, 2005  News media contact: Tita Parham*  
tparham@flumc.org   Orlando {0416}

An e-Review Feature
By Tita Parham

LAKELAND — Beginning Dec. 31 Florida Conference churches will have to pay higher deductibles and an average of 65 percent more for property and casualty insurance premiums.

The increased costs are largely a result of the insurance industry striving to recoup its losses from the recent wave of hurricanes and other natural disasters and shield itself from future losses, according to Randy Casey-Rutland, conference treasurer and director of the conference's financial services office. He says the high number and cost of property claims in the conference are also a factor.

"There are some industry-wide trends driving these issues. For us in the Florida Conference some of the changes are being driven specifically by Charley, Frances, Jeanne and Wilma," he said.

The increases are occurring now because the conference's property and casualty insurance policy is renewed each Dec. 31. This year the carriers that offer property and casualty insurance demanded significantly higher premiums and deductibles.

Casey-Rutland said the risk management committee looked for alternatives to provide coverage at lower costs, but found few. To get better deductibles meant paying even higher premiums.

"The risk management committee is very unhappy, frustrated and disappointed with the market we face," he said. "We have a lot of anxiety and concern over the financial health of our churches. Some are still struggling with the effects of recent hurricanes."

Casey-Rutland said the committee will continue to explore ways to buy the best coverage at lower premiums, but much will depend on the number and cost of future claims in the conference.

"To the extent we have a moderate hurricane season and fewer claims the trend would be that rates would come down," he said. "If the Florida Conference continues to experience increased claim levels in property and liability, we will be faced with this problem again in the future."

The average increase per church is based on an overall increase of 60 percent to 65 percent in the conference's property and casualty insurance policy, which is a group policy covering all Florida Conference churches. Actual increases will vary from church to church. Churches that have added new buildings or increased the listed value of existing properties will likely pay more, as well as churches located in areas considered at greater risk of damage from natural causes, such as hurricanes.

Churches will receive a billing statement in early January that reflects the changes in premium costs.

Of the deductibles, Casey-Rutland said one of the biggest changes is to the named windstorm or hurricane deductible. It will increase 2 percent to 3 percent per building, depending on the county. The deductible for relatively minor property claims, such as lightning strikes or theft, will also increase from $750 to $5,000 per incident.

All properties, buildings and facilities will also now need to be listed on billing statements. Those not listed or valued appropriately will not be properly insured. Previously, the conference had a kind of "blanket" property insurance, generally allowing all buildings to be fully insured even if they were not listed or valued correctly.

Individuals responsible for the oversight of facilities will need to review all properties to ensure they are listed and valued correctly. A Web-based evaluation tool that helps determine a property's value is available at http://www.buildingjournal.com.

Beginning Dec. 31, a new claims administrator will handle the conference's property and liability claims. The Johns Eastern Company will replace Cramer, Johnson, Wiggins (CJW). Casey-Rutland said the risk management committee initiated the change to help ensure claims will be handled more effectively and efficiently. The Johns Eastern Company will handle only new claims.

For information about claims procedures and coverage go to http://www.flumc2.org/page.asp?PKValue=841 on the conference Web site or contact Marilyn Swanson, interim director of the risk management program, at riskmanagement@flumc.org or 800-282-8011, extension 137, or Casey-Rutland at treasurer@flumc.org or 800-282-8011, extension 113.


This article relates to Florida Conference Risk Management.

*Parham is managing editor of e-Review Florida United Methodist News Service.

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