The requirement by the Florida Conference that disaffiliating churches acquire property and liability insurance equal to the Conference’s current insurance policy has caused some to ask why this action is necessary. Insurance in the state of
Florida is a complicated matter, and the need for additional information is understandable. 

A decision in 1996 by The Florida Annual Conference of the United Methodist Church about property and liability insurance costs has allowed its more than 500 member churches to obtain excellent coverage at a reasonable cost.

Four years after Hurricane Andrew threw the Florida insurance market into turmoil, voters at the Annual Conference approved a self-insurance program for all churches.

Administered now by the Conference Ministry Protection Committee in conjunction with the Conference Department for Ministry Protection in Lakeland, it has allowed churches to navigate Florida’s often turbulent insurance rates. Johns Eastern is the Third Party Administrator for claims, but the company has no role in helping the Conference procure property insurance coverages.

Instead of individual churches trying to find policies at a considerable cost, being part of a large collective kept prices down while providing excellent coverage. They pay an annual allocation to the Conference based on their individual risk factors.

The self-insured program covers churches for up to $250,000 for property losses and up to $1 million for liability losses for each claim. If a claim goes over the self-insured amount, there are additional insurance layers to absorb that cost.

“Our buying power was increased,” Department of Ministry Protection Director LaNita Battles said. “We were able to get coverage that some individual churches couldn’t get on their own. Other denominations saw what we were doing and how effective it was.

“We even had a church from another denomination ask if they could join our pool. Sorry, that’s flattering, but that’s not how it works.”

That sentiment is especially relevant now as churches consider whether to stay in the Conference or leave through disaffiliation. Churches that disaffiliate will no longer have access to Conference insurance and will need to find private insurance, possibly at considerably higher rates.

The disaffiliation agreement requires departing churches to obtain $1 million in liability insurance to protect both the disaffiliating church and the Conference against potential lawsuits charging sexual misconduct, molestation, injuries on church property, or other possible issues.

After disaffiliation, these claims would not be protected by so-called “tail coverage”—a term that refers to an extended reporting period for liability claims that are made after a policy has been terminated but are based on incidents that occurred before the policy was terminated.

The main reason for that is because the Conference insurance policies have not been terminated.

The disaffiliation agreement for churches choosing to leave the denomination does not require them to obtain tail coverage. Instead, it mandates that they acquire a new insurance policy with a retroactive date for incidents at least three years before the church’s official departure from the denomination.

This comes while Florida’s overall insurance market continues to experience political and economic turmoil. Nine companies pulled out of Florida in 2022, reducing competition. Claims made after four major hurricanes since 2016 are part of the reason. Verisk Extreme Event Solutions—a company that provides risk modeling for individuals and corporations—estimated that damage from Hurricane Ian could reach $57 billion in Florida.

Another reason is that companies complain that frivolous lawsuits and fraud in the aftermath of storms drive up costs.

The Florida Legislature spent two special sessions grappling with the latter issue, but it remains to be seen how effective its attempt to mitigate that issue will be.

“You hear it all the time on the news,” Battles said. “Insurance companies are apprehensive about Florida right now.”

It adds up to a potentially costly problem for churches seeking private insurance. But the Conference remains focused on finding the best coverage at the best price for the churches that remain.

Joe Henderson is the News Content Editor for FLUMC.org.
jhenderson@flumc.org