US Churches Face Soaring Insurance Costs

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – Churches across the western United States are facing soaring insurance premiums, and even potential closure, as high building costs and extreme weather, including hurricanes, wildfires, severe thunderstorms, and flooding buffet their regions, Religion News Service (RSN) reports.

Insurance companies that specialize in covering churches, including Church Mutual, GuideOne, and Brotherhood Mutual, have announced dramatic decreases in their reserves as a result of storm-damage payouts and soaring post-COVID construction costs, RNS reports. “That’s led them to drop churches they consider high risk in order to cut their losses,” RNS noted in its report.

Churches are considered high-risk insurance clients for diverse reasons, including being open to the public, running social service programs, and often having large buildings to insure.

Another factor affecting the coverage of churches is that they have little governmental oversight. “Because of the First Amendment and the separation of church and state, ministries are largely unregulated,” Charles Cutler, president of Church West Insurance Services, told RNS. “And unregulated businesses are difficult to underwrite.”

Churches with the United Methodist denomination are particularly vulnerable to rising insurance premiums as the UMC’s Book of Discipline requires them to carry insurance for the full replacement cost of their buildings plus liability insurance, RNS reports.

“Hundreds of United Methodist churches in the Rio Texas Annual Conference learned they’d lost property insurance in November last year, leaving church officials scrambling,” RNS said.

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