Natural disaster costs have overwhelmed the market for carriers, which are raising rates or dropping policies for congregations in high-risk areas.
John Parks was taking his first sabbatical in 40 years of ministry when he got a call from his church’s accountant with some bad news.
Church Mutual, the church’s insurance company, had dropped them.
“This does not make sense,” Parks, the pastor of Ashford Community Church in Houston, recalls thinking at the time. “We’ve never filed a claim.”
Five months and 13 insurance companies later, the church finally found replacement coverage for $80,000 per year, up from the $23,000 they had been paying.
“It’s been an adventure,” said the 69-year-old Parks from his home in Houston, where the power was out after Hurricane Beryl. “That’s putting it politely.”
Parks and his congregation are not alone. An ongoing wave of disasters—Gulf Coast hurricanes, wildfires in California, severe thunderstorms and flooding in the Midwest—along with skyrocketing construction costs post-COVID have left the insurance industry reeling.
As a result, companies such as Church Mutual, GuideOne and Brotherhood Mutual, which specialize in insuring churches, have seen their reserves shrink. That’s led them to drop churches they consider high risk in order to cut their losses.
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. More than six months later, some churches have found new insurance, often at a steep increase. Others still have none, said Kevin Reed, president of the conference board of trustees.
Reed said the conference had about a month’s notice that its property insurance policy, which local congregations could buy into, was being …