When bad things happen to good church buildings
If your facility is damaged or destroyed, will you have adequate insurance to rebuild?
By Fritz Hahn
Our experience, government data and private studies have shown the vast majority of church facilities are undervalued for insurance purposes.
In other words, an insurance contract has been written placing the value of a building at $700,000. However, its actual replacement cost could easily be more than $1 million (these numbers are for illustration purposes only).
Values are often determined by insurance agents who – out of self-interest or ignorance – set the valuation too low. While this lowers the premium, it also sets the church up for a financial crisis in the event of a catastrophic facility loss.
How does the crisis occur? To use the previous example:
The church was valued at $700,000.
It costs more than $1 million to replace it.
You’re short $300,000.
Often, churches do not ask the agent about the valuation of their property. Sometimes, agents will not reveal the valuation they assigned, calling it “proprietary.”
All of this is unethical and totally unacceptable. At Ministry Pacific, we make sure your building is valued correctly, but that’s not all. You need coverage for the replacement value of your facility. This could include:
Higher costs due to updated building codes.
Expenses related to complying with environmental regulations.
Rising construction labor and materials costs.
Renting a facility while your building is repaired or rebuilt. This could take two years or more.
Removing debris.
“A facility that is undervalued will not account for any of these factors, leaving the congregation scrambling.”
At Ministry Pacific, our non-commissioned sales team is completely separated from determining building valuations. Instead, an employee professionally certified in building valuation works with churches to determine the true value of their facility. The church, of course, gets full access to our findings.
Although we don’t do the rebuilding, we work behind the scenes to make sure you have the funds to do so. We also offer resources to help you take your next step.
We partner with a national commercial construction firm that consults with you at no charge on losses over $250,000.
It’s tempting to do nothing. But in the event of a catastrophic loss, you’ll be glad you did the research to allow your church to move forward and continue its legacy.
YOU’RE NOT IN THIS ALONE
There’s no need to be overwhelmed. We’re here to help you make sure your facility building valuation accurately reflects the cost to rebuild. This is a free service that comes with being a valued customer of Ministry Pacific. Please contact us today.
Fritz Hahn is the founder of Ministry Pacific, a brokerage representing more than 1,000 churches in the Western United States.
