United Methodist Insurance Company, Inc. (UMI) operated from 2010 to 2018 and has insured a cross-section of United Methodist churches and agencies. We have currently operated as the United Methodist Insurance Program since (UMIP) 2019. UMI's operation has handled a significant number of claims and reimbursed over $65,000,000 in property and liability claims. What can we learn from this experience that could better enable us to avoid as many losses as possible in the future? For discussion purposes we will separate property claims from liability claims
Property claims Over 96% of the dollar value of claims paid by UMI were for property losses. As would be expected, most losses were related to storms. Wind and hail accounted for about 59% of all reported claims. While it might seem that there is nothing that can be done to fight nature, there are some lessons to be learned. We have seen situations where claims were denied or exacerbated by things that care and maintenance could have improved or eliminated:
Ensure that your roof, eaves, flashing, and gutters are maintained. Damage caused by water that enters a building is only covered if it does so through an opening created by a covered peril.
A newer, well-maintained roof may also help reduce the likelihood of disputes with insurance carriers over the cause of interior damage and could speed the resolution of claims.
Keep drains and sump pumps clear of debris and in good working order. If possible, provide a backup source of power for your sump pump in the event of a power failure that often accompanies severe storms.
Keep large trees clear of your roof and ensure that dead limbs are removed. This can be expensive, but it can help prevent a loss – the greater your deductible, the greater the risk to your church’s finances.
Another potentially expensive fix is to make sure that there is proper drainage around your buildings. Water entering under doors may not be covered. This was the number one source of property claims being denied.
Fires were not a frequent source of loss, but four of the six most significant losses were caused by fires.
Follow fire prevention tips when using candles.
Make sure that your electrical system is reliable and that it meets current codes.
If you have a kitchen, keep your exhaust vents free from grease.
Keep smoke detectors, sprinklers, and alarm systems up to code and in good working order.
Leaks and overflows were the third leading cost of claims.
Leak detection alarms have become less expensive and more widely available. More expensive systems can automatically shut off water when a leak is detected. These systems should be professionally installed for best results.
Frozen pipes can cause significant damage. Insulate any exposed pipes, make sure there is sufficient heat in the building, open cabinet doors, and let water drip. If you attempt to thaw a frozen pipe, use a hair dryer, not a torch. Please, do not stand in water while doing so!
Burglary and vandalism were the third and fourth leading causes of damage. We consider them together as both result in considerable damage to property. Burglaries are often facilitated by forced entry to property and often include vandalism in addition to theft.
A monitored central station fire and burglary alarm system is a good solution if it’s in your church’s budget.
It is a good idea to have dusk-to-dawn, or motion sensitive, lighting around the building and at entrances.
Eliminate landscaping that provides hiding places near doors and windows.
Secure windows, basement entries, and external stairways. Use deadbolt locks and metal-lined exterior doors with metal security bars.
Do not leave expensive items in plain view of open windows.
Clean up vandalism as soon as possible after it happens.
Liability claims As would be expected, slips, trips, and falls were the source of 93% of general liability occurrences and 78% of the cost of liability claims.
Make sure that all outside walkways and parking lots are clear of ice, snow, and debris.
Give immediate attention to all uneven surfaces to help eliminate trip hazards.
Keep interior doorways, floors, and aisles dry and free of obstacles.
Provide adequate lighting in all interior and exterior walkways and parking lots.
Properly secure electrical cords, mats, and loose flooring.
There are certainly other sources of claims that can be addressed including misconduct and playground safety, but these are the most common sources of loss that churches experience. Reducing the number and severity of these types of losses can go a long way to helping protect the people, property, and finances of your church and increase the resources available for the fulfillment of our mission on earth.
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.
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