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Conference keeps insurance increases to a minimum

Conference keeps insurance increases to a minimum

e-Review Florida United Methodist News Service

Conference keeps insurance increases to a minimum

Jan. 7, 2007  News media contact: Tita Parham*
800-282-8011  Orlando {0601}

An e-Review Feature
By Erik Alsgaard**

Photo compilation by Greg Moore, Photo #07-501.
LAKELAND — Insurance rates for property and casualty coverage in the Florida Conference are increasing only 7.5 percent for 2007. Add taxes imposed this year by the state of Florida to help fund the Citizen’s Insurance deficit and the total increase will be slightly more than 12 percent, according to Mickey Wilson, the conference’s treasurer.

The conference’s 2007 taxes for the Citizen’s Insurance fund will exceed $1.2 million, an increase of more than $700,000.

“At a time when abnormal hurricane activity has changed the insurance environment, not only here but in every state with hurricane exposure, we were able to hold the line (at this increase),” Wilson said. “Coverage that was inexpensive in the past is either not available today or has doubled or tripled in price.”

The increase was kept to a minimum by capping the maximum amount of catastrophic coverage per storm at $46 million, according to Wilson. Previously, the conference was insured at approximately $70 million. In addition, a flat broker commission fee was negotiated, saving almost $250,000, an additional corridor was assumed, saving almost $150,000, and aggressive, competitive bidding for other types of insurance was practiced.

“We’ve done extensive research, using hurricane models from the insurance companies and the weather bureaus,” Wilson said. “The likelihood of sustaining $46 million in damage in one storm is about 1.5 percent, meaning there’s slightly more than one in a hundred chance of sustaining that amount of damage.”

The $46 million in coverage, Wilson noted, is more than twice the dollar amount the conference has sustained in one storm.

Every church in the Florida Conference must participate in the conference’s insurance plan, a fact Wilson applauds.

“The group of leaders who constructed this complex and sophisticated program of insurance are to be commended for their hard work and vision,” Wilson said. “I applaud the conference for its action of voting to make it mandatory for churches to be in the program. The members of the Florida Conference are unique in their understanding of connectionalism and their commitment to each other.”

Wilson said premiums for local churches are due almost immediately after the effective date of coverage. The Florida Conference borrows about $13 million every year to make the premium payment in one lump sum and relies on the conference’s churches to pay their fair share to pay back the loan. Wilson said interest charges on this loan exceeded $500,000 last year.

“This year, in hopes of lessening the costs, we’re offering churches a 2 percent discount if they pay in full before Feb. 1,” Wilson said. As has been done in previous years interest of 1.5 percent per quarter will be assessed to those unable to pay in January.

Wilson said local churches can help keep future rates lower by being more prepared for storms and other events than they were even a short time ago.

“I know how expensive and difficult it can be for churches to keep up with building maintenance and hurricane preparations,” Wilson said. “If we practice good stewardship today it will pay off in the long run.”

Wilson said the extra steps churches can take to decrease the chances of severe storm damage range from making sure the roof is up to code to installing hurricane-approved gutters and downspouts.

Wilson commended Roger Bond, chairman of the conference’s Ministry Protection committee, formerly the risk management committee, and its group of volunteers for their outstanding work over many hours to bring the insurance renewal process to completion. “We are all in Roger’s debt,” Wilson said.

“Additionally, I want to thank Marilyn Swanson for heading the fine Ministry Protection staff, and welcome Mark Thomas, who will be leading this group in the future,” he said.

“Hurricanes are a fact of life here in Florida,” Wilson added. “While we can pray that the storms don’t come our way, being prepared — and being insured for the worst — is the best course of action we can take.”

Why is it called ‘Ministry Protection?’

Wilson said he has received several questions on why the conference’s insurance program is called “ministry protection” rather than “risk management.” The comments, he said, center on the idea that the insurance is for “assets.”

“When I watch a child being baptized and hear each member of the congregation pledge to surround the child as a community of love and forgiveness, or when I attend a confirmation class graduation, or when we open the doors of our churches to the homeless and reach out to the less fortunate, I don’t think of the assets on which the meals are being served or how the assets are allowing me to worship in comfort,” Wilson said. “Rather, I think of the ministries being offered and the need to ensure that these ministries are being properly protected.”


This article relates to Florida Conference Administration/Property and Casualty Insurance.

*Parham is managing editor of e-Review Florida United Methodist News Service.
**Alsgaard is director of communications for the Florida Conference.