Churches nationwide are grappling with a growing challenge—obtaining and maintaining insurance coverage. With rising premiums, stricter underwriting requirements, and increasing risks, protecting places of worship has never been more complex. Our team frequently hears from churches struggling with these issues, so let’s break down the key factors shaping church property insurance and explore proactive steps to safeguard your ministry.
1. Rising Insurance Premiums
One of the most pressing challenges churches face today is the sharp rise in insurance premiums. Several factors are driving these increases, making it more difficult—and expensive—for faith communities to protect their places of worship.
- Natural Disasters: Hurricanes, wildfires, floods, and other natural disasters are happening with more frequency and severity, leading insurers to raise premiums to cover increased claim costs. 2024 was no exception, with the devastation of Helene and Milton in the 4th quarter of the year. Older buildings are especially vulnerable.
- Economic Inflation: The cost of building materials and labor for repairs has surged, driving up the expense of rebuilding after an incident. This trend has led insurers to adjust premiums and deductibles to account for these higher costs.
Beyond rising costs, many churches are facing policy cancellations altogether. Insurers are tightening their underwriting standards, pulling out of high-risk regions, and refusing to cover certain types of buildings. We’ve heard reports of carriers:
- No longer writing policies in wildfire-prone areas
- Dropping wind coverage in storm-heavy regions
- Refusing to insure older buildings or roofs
- Setting size limits on churches they are willing to cover
For churches operating on tight budgets, these increases aren’t just an inconvenience—they can directly impact ministry and outreach efforts. As insurance costs climb, many congregations are left with difficult financial decisions, struggling to balance protection for their facilities with their mission.
2. Aging and Vulnerable Infrastructure
Many churches gather in buildings that are decades—or even centuries—old. While these structures carry deep historical and spiritual significance, they also present serious insurance challenges.
- Outdated Systems: Older electrical, plumbing, and HVAC systems are often prone to failure, posing higher risks for incidents like fire or water damage. Insurers see these as costly risks.
- Specialized Repairs: Historic church buildings often require specialized materials and expertise for repairs, adding to the cost of coverage. It is not just historic facilities that have specialized repairs that are significantly expensive (i.e. stained glass, pipe organs, steeples, etc).
Another critical factor is fire suppression systems—or the lack thereof. Many churches built before 2000, especially those with a worship capacity under 300, do not have automatic sprinkler systems. Without these fire protection measures, insurers may deem the building a higher risk, leading to increased premiums or difficulty securing coverage.
Power reliability is another growing concern. The absence of backup generators or battery storage leaves many churches vulnerable during extreme weather events. Recent nationwide freeze events have caused power grid failures, particularly in regions reliant on electricity for heating. Without modern updates, churches may face operational disruptions and struggle to meet insurers’ evolving requirements.
3. Roof Age and Condition
A church’s roof is one of its most vital structural components, but as it ages, it can become a major insurance challenge. Insurers closely evaluate roof condition, and policies may come with significant restrictions for older or deteriorating roofs.
- Maintenance Matters: Roofs nearing or exceeding their expected lifespan pose higher risks for leaks, water damage, and even structural issues—costly concerns for insurers. Proactive maintenance and timely replacements can help mitigate these risks.
- Coverage Limitations: Many insurance companies impose strict policies on aging roofs. Some refuse coverage altogether for roofs over 20 years old, while others may only insure them for Actual Cash Value (ACV) rather than Replacement Cost Value (RCV).
Understanding ACV vs. RCV is crucial. For example, if your church’s roof originally cost $50,000 but is now 20 years old, its ACV may only be $5,000. That means if you file a claim for roof damage, your insurance may only cover $5,000, leaving the church responsible for the remaining $45,000.
*Important Note: This is a general example based on reports we’ve received. Insurance policies vary by state and provider, so we strongly recommend discussing your church’s specific coverage with a local agent to understand potential limitations.
4. Increased Liability and Security Concerns
As property crimes and security threats at places of worship continue to rise, insurers are scrutinizing safety measures more than ever. Churches that fail to address these risks may face higher liability premiums—or even difficulty obtaining coverage.
- Vandalism and Property Crime: Churches, which often leave their doors open to the community, may be targets for vandalism, theft, and even violent incidents. Insurers evaluate how well churches address these risks when setting premiums.
- Violence and Safety Concerns: Given recent incidents of violence in places of worship, insurers are paying closer attention to security measures, and churches lacking these may face higher liability premiums.
Proactive security investments—such as improved lighting, alarm systems, and emergency response plans—can not only enhance safety but also reduce insurance costs. Demonstrating a commitment to risk mitigation reassures insurers and helps protect both the congregation and the church’s financial stability.
5. Geographical Location and Risk Exposure
A church’s location plays a significant role in its insurance costs and overall insurability. Certain geographical factors can introduce unique risks that impact coverage options and premium rates.
- Natural Disaster Zones: Churches located in areas prone to natural disasters like floods, hurricanes, or earthquakes may be required to carry specific, high-cost policies.
- Rural Risks: Rural churches may not have municipal water sources to fight a fire. This is also a factor in the availability of water to feed an automatic fire suppression system.
- Urban Sprawl: We are seeing more communities expanding into wildfire areas, building along the coast, building along the riverfront, and lower-lying areas, which can increase exposure to conditions that could increase risks.
For churches in high-risk locations, working with insurers who specialize in properties with unique exposures can make a difference in finding comprehensive and cost-effective coverage.
6. Limited Budget and Economic Constraints
Unlike businesses with steady revenue streams, churches rely heavily on donations—making rising insurance costs a significant financial strain, especially for smaller congregations. With already tight budgets, many churches face difficult decisions about how to afford adequate coverage without compromising their ministry efforts.
In an attempt to control costs, some churches reduce coverage or increase deductibles, but this can lead to even greater financial risk. In the event of a major loss, inadequate insurance could leave the church struggling to recover, far outweighing the short-term savings on premiums.
Church leaders must carefully balance budget constraints with the need for comprehensive protection, ensuring their facilities and ministries remain safeguarded against unexpected events.
7. Documentation and Proactive Maintenance with Smart Church Solutions and eSPACE
One of the most effective ways for churches to improve their insurability is through proactive maintenance and meticulous documentation. This is where tools like Smart Church Solutions and eSPACE can play a pivotal role. Through facility management software, churches can track and document all aspects of building upkeep, from inspections and repairs to regular maintenance.
- Establish a baseline: Your leadership needs to understand and face the reality of the condition of your facility by having our team perform a Facility Condition Assessment. This comprehensive report will identify areas of concern and those needing immediate and short-term attention. This step alone can play a huge role in preventing incidents in your facility.
- Track and Report Maintenance Efforts: By tracking maintenance schedules and documenting completed repairs, churches can provide insurers with evidence of proactive care, helping to mitigate perceived risks.
- Proactive Planning: eSPACE enables churches to create preventative maintenance plans, which can extend the life of key building systems, such as roofing, HVAC, and electrical systems. This proactive approach is valued by insurers and may result in favorable consideration.
- Transparency with Insurers: Having detailed records of maintenance and safety measures provides transparency with insurers, showing that the church is committed to maintaining a safe, well-kept facility.
A Path Forward: Safeguarding Your Place of Worship
Navigating the complexities of church property insurance is no small task, especially in today’s ever-changing landscape. However, by understanding the key factors that influence coverage and taking proactive measures, churches can better protect their facilities while keeping premiums manageable.
Smart Church Solutions and eSPACE provide essential tools to help churches track, document, and report maintenance efforts, demonstrating a commitment to property upkeep that insurers value. Proactive maintenance not only reduces risk but also strengthens a church’s ability to secure and maintain affordable coverage.
While insurance challenges persist, churches that prioritize risk management and facility stewardship can safeguard their places of worship—ensuring they remain safe, secure, and financially sustainable for years to come.
