It’s estimated that more than one third of all churches file an insurance claim each year. Your choice of insurance carrier may not seem like a big deal — until you have a claim. If it’s a big claim, your carrier and the policies you purchased can make all the difference.

The following simple six-checkpoint review can help you see if you have costly gaps in your property and casualty coverage:

1. Check out your insurer’s financial strength rating.
Every insurance company is evaluated and rated for the organization’s performance and financial stability by rating services such as A.M. Best, Moody’s Investor Services, Standard & Poor’s Insurance Rating Services and Fitch Ratings. These ratings provide an objective evaluation of a company’s financial strength. The higher, the better — in these economic times, look for companies with A ratings.

2. Review your policy’s inflation protection.
From one year to the next, the value of your property may not change much. But if you bought your policy ten years ago and haven’t updated your property value, it may not be sufficient to replace your property in today’s dollar values.

To allow for inflationary changes in your property’s value, your insurance policy should include an option to increase your property limit by a specific percentage every year. Make sure your carrier offers this valuable protection.

3. Make sure your policy covers “replacement cost” instead of “actual cash value” for building and property damage.
With “actual cash value,” depreciation reduces the value of your property over time. As a result, if you have a claim, you’ll have to make up the cost difference of replacing the property versus its actual cash value.

4. Look for coinsurance penalties that could make you underinsured.
Some policies include a coinsurance penalty that potentially limits your reimbursement if you originally underestimated the replacement value of your property. For example, if you insured your property at 80% of its value, you may only be paid 80% of a loss if you have a claim. You may decide that you don’t want the coinsurance penalty.

5. Check your coverage for pastoral counseling and alleged abuse claims.
These days, ministries are not immune to legal action. Pastoral counseling and alleged abuse claims can be extremely costly — even if the accusations aren’t true. Counseling and abuse liability coverages could protect your ministry.

6. Look for non-owned automobile coverage.
If your church ever uses member or staff vehicles to conduct church business, you may need non-owned automobile coverage. Even if volunteer drivers are fully insured, your church can be held responsible in the event of an accident or injury.

There’s a niche for everything these days — and that includes property and casualty insurance. There are special policies and coverages tailor-made just for churches and ministries. If you’re shopping or renewing your policy, check out special ministry coverages.

Dust off your current policy and ask your insurance agent to walk you through your coverage — now — before you really need it.

If you’re renewing your policy this year, get a quote from the new GuideStone Property & Casualty Program. Call 1-877-455-GSPC (1-877-455-4772), visit our website or email us at guidestone@zisinternet.com.

This article is for informational purposes only and is not intended to be construed as legal advice. Readers should use this article as a tool, along with best judgment and legal advice to determine appropriate use of reviewing a P&C insurance policy.