Some churches in the Great Plains Conference could see their property insurance premiums increase by at least 25% in 2020.
The churches were part of a mandatory insurance program implemented by the former Kansas East Conference in 1999. About 50 churches that were formerly in the Kansas West and Nebraska conferences opted for similar policies.
The increase comes after a 30% decrease in premiums that was offered in 2017 for a three-year period.
“There’s a general tightening and increase in the property insurance market that’s happening right now,” said Scott Brewer, conference treasurer and director of administrative services.
The increase is small compared to some areas that have had catastrophic exposure to weather, where premiums have risen anywhere from 50% to 100%, Brewer said.
“It could be worse,” he said.
The weather conditions in the Great Plains are part of the reason for the increased premiums, he said. According to the U.S. Department of Commerce and National Weather Service, Kansas was second and Nebraska fourth in 2018 for number of major hail events.
“When you think about 2019 and there was major flooding in Nebraska and Kansas … weather has been more violent. We’re having more severe weather events,” Brewer said. “There are other insurance companies that have gotten out of insuring churches.”
Sue Courtney, with the Kansas City, Missouri-based insurance broker AssuredPartners, which has worked with the conference for many years, said the weather conditions have been unprecedented.
“It’s the worst I’ve seen in 20 years as far as property capacity, property rates,” she said. “Most insurance carriers are wanting a percentage on the hail deductible (rather than a flat rate), which would be horrible for a church.”
Courtney said through the first 10 months of 2019, the former Kansas East churches had an 80% loss ratio.
“Our losses so far exceed our premiums,” she said. “In Great Plains alone, … I believe the current year is a 500% loss ratio, which means they’re paying out about five times more than they’re taking in.”
Courtney said many churches in the Great Plains Conference have contacted her company to ask about premium increases for 2020, but the final percentage was only negotiated recently.
As with the news of any price increase, Brewer said the temptation may linger for churches in the former Kansas West and Nebraska conferences to shop around for a better price. He urged churches that choose to do so to proceed with caution.
“I always want people to be aware that if you go to another insurer, make sure you have adequate coverage,” he said. “While it’s always great to be able to get a good deal for that first year, often times you … see a significant increase in the second year.”
Courtney and Brewer said that churches can opt for a monthly premium payment plan — with a small service charge on the unpaid balance, Courtney added — rather than paying the entire amount at once.
The decrease in 2017, Brewer said, was thanks to increased competition in the insurance market.
“If you compare ’17 to ’20, it doesn’t really look that different. We enjoyed a three-year lock at significantly lower rates,” he said. “It was a really excellent deal we got, but those three years are up.”