Rising Costs, Shrinking Coverage for Camps

The camp insurance market has shifted drastically over the past five years, with especially sharp changes in the last 1-2 years. This has led to camps across the country, being faced with premiums multiplying and coverage pullbacks. There are a few reasons for this:

• Lack of Competition. 5 years ago, there were two or three more insurers willing to provide adequate coverage at a competitive rate for camps across the US. Currently, there are perhaps three or four carriers total who are even considering offering quotes on camps currently.

• Property Issues & Claims. Camp property is traditionally frame construction and in high protection class areas (areas that are difficult for fire departments to access). Most insurance company modeling identifies this combination as extremely undesirable. This results in higher rates and worse terms/conditions on policies.

• Liability Exposures & Pricing. Traditionally, liability insurance costs for camps has been less than $10,000 for your average sized camp. Given the operations of camps often have ropes courses, zip lines, shooting ranges, etc. the average liability claim was four to five times the annual premium paid. With social inflation continually pushing up the average claim payout as a result of bodily injury, this number is growing much faster than insurance premiums have.

In recent years, insurers in the camp space have lost millions on property and liability claims. As a result, most have either exited the market or raised premiums significantly while reducing coverage. Our experience is that there are camps all across the country that do not purchase property coverage because it is either (1) unavailable or (2) not affordable. Some camps are buying liability only policies that exclude a number of their primary exposures such as water activities, zip lines, and climbing apparatuses. Unfortunately, even though your renewal offer might have a significant premium increase and lower limits, there is a good chance it still might be your best option.

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This content has been prepared by United Methodist Insurance Company (UMI) for informational purposes only. No article or document may accurately contemplate all possible scenarios or church resources. As such, this information is meant to foster discussion by the individual church and its members to develop a plan tailored to its own circumstances. UMI is providing this information with no warranties or guarantees of any kind and it should not be viewed as legal, financial, or other professional advice. All liability is expressly disclaimed. Any claim examples described herein are general in nature, may or may not be based on actual claims, and are for informational purposes only. Any coverage available for a claim is determined from the facts and circumstances of the claim as well as the terms and conditions of any applicable policy, including any exclusions or deductibles. In the event of a conflict with the content herein, the terms and conditions of any issued policy will control. Individual coverage may vary and may not be available in all states.

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