Understanding Property Valuation for Church Insurance

This article was created based on a response to a series of questions we received from a member church.

As questions about insurance coverage and property valuations become increasingly common among church leaders, it's essential to understand how valuation works and why it matters. Below are insights from the United Methodist Insurance Program (UMIP) in response to frequently asked questions about establishing a proper building valuation.

Why Valuation Matters

The valuation of a church building for insurance purposes is based not on market value, but on the cost to repair or rebuild the structure. Historically, insurance companies would accept the value provided by the insured unless it appeared to be too high or too low. Today, however, there’s a growing trend of insurance carriers determining the building’s value based on proprietary models. These valuations are often nonnegotiable and can result in increased premiums.

Having a professional valuation from a reputable source may help, but it doesn’t guarantee the carrier will adjust their estimate. Nevertheless, establishing an accurate valuation is crucial—especially for meeting co-insurance requirements and ensuring the church receives sufficient coverage in the event of a loss. Make sure the carrier’s estimate meets the amount you would need to rebuild.

Who Determines the Valuation?

It is typically the responsibility of the insured—that is, the church or ministry—to determine and propose a value for the property. While churches can do this internally, many opt to hire outside professionals with expertise in insurance-related appraisals.

Choosing a Qualified Evaluator

When selecting an outside appraiser, look for professionals who adhere to the Uniform Standards of Professional Appraisal Practice (USPAP®). Additional credentials, such as membership in the Appraisal Institute and adherence to its Code of Professional Ethics, can also indicate reliability. Churches should verify an appraiser’s references and experience—especially experience specific to insurance valuations. In Minnesota, for example, Sec. 82B.195 MN Statutes outlines standards for appraisal professionals.

Special Considerations

• Parsonages: Stand-alone parsonages are included under “All Church buildings” and should go through the same valuation process.

• Special Risk Coverage: This type of policy covers all causes of loss except those specifically excluded.

• Stained Glass Windows: Valuing stained glass can be especially nuanced. There are few certified appraisers for stained glass in the U.S., but accredited studios—such as Gaytee-Palmer Stained Glass Studio in Minneapolis—may be able to help.

Involving Your Carrier

It’s wise to involve your insurance carrier in the valuation process. They often have up-to-date knowledge on construction costs in your region and will ultimately decide whether the value you’ve placed is reasonable. The more accurate your valuation, the better your position in the event you need to file a claim.

Have More Questions?

UMIP is here to help churches navigate the complexities of insurance coverage with care and integrity. If your church is unsure where to begin or needs guidance on valuations, reach out to our team at 484-654-3380 or visit our website. As a ministry of the United Methodist church: we can provide advice, policy reviews, and no obligation quotes at no cost to you.

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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.

The commercial insurance coverages for United Methodist Insurance are sold and serviced directly or indirectly by Sovereign Insurance Agency (CA Lic. No. 0B01380) ("Sovereign") and underwritten by various available insurance markets. Sovereign pays United Methodist Insurance a royalty for the use of its intellectual property.