Insurance Essentials

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INSURANCE ESSENTIALS Presented by: GuideOne Insurance

THE MOST COMMON CHURCH CLAIMS — AND HOW TO PROTECT AGAINST THEM

Table of Contents HOW TO CHOOSE THE RIGHT INSURANCE FOR YOUR CHURCH

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The one constant when purchasing insurance is uncertainty. A few days of unexpected rain can carry in its wake a flood of unwelcome expenses and stress.

If your church is like many others, it probably has a limited budget. Plus, the staff is likely busy with ministry activities, and it is difficult to take on additional responsibilities. This can be an issue when it comes to risk management — improving safety for congregants and enhancing your facility’s security.

By Eric Spacek, JD, ARM

Thankfully, insurance minimizes the havoc that can occur from such an event.

By Deb Rushenberg

5 CRITICAL QUESTIONS TO ASK YOUR (POTENTIAL) AGENT

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It’s no secret that purchasing the right insurance coverage for your church is a difficult task, especially without having knowledge in the field.

WHAT HAPPENS AFTER YOU SUBMIT A CHURCH INSURANCE CLAIM?

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Accidents happen. Catastrophes are unpredictable. There are many situations a church might encounter that will require submitting an insurance claim.

To a church, the claims process can be overwhelming, as you might have little understanding of what happens behind the scenes.

To help ease the decision and get a church headed in the right direction, here are five questions you should consider asking your potential agent.

To offer insight and make the process easier for you and your insurance company, learn about who you’ll be working with, how you can be prepared after submitting a claim, and the settlement timeline.

By Deb Rushenberg

By Dave Sours

LEARN THE LANGUAGE: HOW TO READ AND UNDERSTAND YOUR CHURCH INSURANCE POLICY 6 You have just met with your insurance agent to decide what type and amount of insurance coverage will best meet your church’s needs.

WHAT IF WE ARE SUBJECT TO A CLAIM? Coming in February 2016

But, before you make a decision, it’s important to read and understand the terms and conditions of the policy being offered.

By Andy Noga

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INSURANCE ESSENTIALS

CHOOSE WISELY How to choose the right insurance for your church

By Deb Rushenberg

The one constant when purchasing insurance is uncertainty. A few days of unexpected rain can carry in its wake a flood of unwelcome expenses and stress.

Thankfully, insurance minimizes the havoc that can occur from such an event.

Choosing the right insurance, however, is oftentimes a stressful task.

And although insuring a church is similar to that of a traditional business, it does differ in some respects. These differences make choosing the right insurance company rather unique.

A common practice is choosing a company or policy based on price.

However, it’s also important to consider your needs and values when weighing different insurance options.

So, how does a church know it’s selecting the insurance company with the proper coverages to fit its needs? The following tips will help.

Research Generally speaking, most insurance companies are in excellent financial health; however, doing some homework beforehand is a good idea. A church wants to ensure it can rely on the insurance company it selects. To help aid this process, researching a few topics is typically the best way to get started.

• Does the company have the right background in providing the adequate insurance for your church needs? This can include property, liability, professional, business auto, health, travel, workers’ compensation and more.

•W ill it insure church assets? While general liability insurance will provide the kind of protection a church needs, the organization still has assets that are at risk. A comprehensive package protects against property damage, stolen goods and other threats to the things the church owns.

Examples of this include crime coverage, equipment breakdown and sexual misconduct liability.

• Will it grow with your church? Take into consideration the long term.

Will your insurance provider help to accomplish the church’s future goals and aspirations? What kinds of additional value-added products and services are offered? Examples of things to look for include risk management tools, assessments, training videos, endorsements and discounts to vendors.

Rating The best way to check an insurance company’s economic well-being is by looking at its rating. Most privately held companies conduct financial analysis reports and make them available online, in a local library or via churchexecutive.com

the phone. Two of the most popular rating systems are Moody’s and A.M. Best. Although similar in structure, keep in mind that not all agencies use the same rating systems. For example, the best rating at Moody’s is Aaa, but A++ is the top at A.M. Best. Additionally, remember that the rating is comprised of several factors. So, when evaluating two different companies, don’t automatically assume the one with the higher rating is the best choice.

Size Does size of the insurance company matter? It depends. When a large insurance organization has been around for several decades, customers can be fairly certain that it has a history of meeting longterm obligations, understands the complexities of the business and knows how to manage risk.

However, this doesn’t mean a church shouldn’t consider small-tomedium sized companies. Many have been around for just as long as their competition and are considered experts in the field.

Check complaints Insurance companies are held to a certain standard and are regulated to prevent mishaps. Throughout the regulation process, complaints from customers are tracked and are available to view. To look up complaints against a particular organization, visit the National Association of Insurance Commissioners’ database at www.naic.org .

Use an agent Typically, most people buy insurance through agents or brokers; churches are no different in this respect. Determining how much and what kind of insurance to buy is one of the most important financial decisions the church will make — and it’s also one of the most complicated. A qualified insurance agent will provide the church with policy recommendations based on a thorough needs analysis.

Working with the right insurance company, with the right policy, can make all the difference in fully protecting a church facility. If the unthinkable were ever to happen, a church should ensure it has the right insurance company to support its values and needs — one that provides the appropriate products and services, has excellent customer service, and has the financial capacity to meet the church’s needs when necessary.

Asking the right questions, doing some homework, and being satisfied that the right decision has been made will help ease fear among the church and its members.

Deb Rushenberg is Director of Commercial Lines Underwriting at GuideOne Insurance in West Des Moines, IA www.guideone.com, where she is responsible for the overall vision, direction and oversight of underwriting for the Church niche. Rushenberg has been with GuideOne for more than two decades.

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INSURANCE ESSENTIALS

CRITICAL QUESTIONS TO ASK YOUR (POTENTIAL) AGENT

By Deb Rushenberg

Agent \ˈā-jənt\ Noun A person who does business for another person : a person who acts on behalf of another.

In the insurance world, agents — or brokers, in some instances — are oftentimes viewed as the “expert” when it comes to all things regarding liability, protection and coverage. As individuals, protecting things like personal vehicles and homes is thought of as a “no-brainer.”

What isn’t always top-of-mind is protecting the church.

As a ministry, there are innumerable assets and coverage options that should be considered when purchasing insurance. That’s where an insurance agent comes in to help.

SO, WHAT’S AN AGENT? Agents are people who do business with, or act on behalf of, another person. It’s no secret that purchasing the right insurance coverage for your church is a difficult task, especially without having knowledge in the field.

To help ease the decision and get a church headed in the right direction, the following are five questions you should consider asking your potential agent. #1: “What’s your area of expertise?”

Begin with a preliminary question. This will help determine if moving forward with a particular individual is worth your time, or if you should consider someone else. For example, some agents might focus mostly on healthcare. As a church seeking commercial coverage, this wouldn’t be an agent you’d want to move forward with.

Secondly, there are two types of agents that should be considered: those who work for several different insurance companies, and those who solely 4

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do business with just one. A church should decide which they prefer before continuing the process, as there are pros and cons to both options.

Independent agents — those who do business with several companies — will most likely have a broader scope of coverage and pricing options for the church to choose from. Captive agents — those who sell insurance for just one company — will have personalized, in-depth knowledge about what their own company can offer.

Additionally, research the agent and the company / companies he or she works for. It’s common for customers to ask for a list of references to gain more knowledge and gather feedback from similar establishments — in this case, other churches. Is the agent knowledgeable about the products and services they’re offering? Can the agent answer any questions you might have? Does the insurance company have a strong reputation? Does the company specialize in a certain area?

All these questions are important in determining which agent and insurance company the church ultimately chooses. #2: “What kinds of coverages are needed to fully protect our church?”

As a church, there are several aspects of the organization that should be considered: the building, vehicles, church members, employees and so on. Although these items can be insured separately, it’s beneficial (and much easier) to purchase them from one company. Upon inspecting and evaluating the church, agents can make recommendations so that everything the church owns is protected properly and in its entirety.

It’s also important to understand the insurance jargon written within the policy. Insurance agents should be able to fully explain the terms so that they’re easily understood by the church, as protecting the entire congregation is the sole purpose. #3: “What value-added products and services does your company offer?”

Insurance companies sell insurance policies; there’s no doubt about that. But, what else do they offer in addition to basic coverages? This is a very important question to ask your agent, as most companies they work for will offer several perks along with a written policy. Examples include risk management tools, endorsements, building construction or other services, discounts to vendors and training videos.

Additionally, your relationship with the agent, as well as the agent’s relationship with the company he or she works for, is something to consider. Ensuring the agent is accessible when the church is in need of assistance is oftentimes overlooked, but it can make all the difference in the long run. churchexecutive.com

If the agent is local, the chances of him or her being available upon request are much higher than if the agent is non-local and works in several states. A local agent can handle your account on a day-to-day basis with little to no wait time. A non-local agent might have an assistant tending to your needs and will be unable to answer your questions in a timely manner. #4: “What’s the average time it takes your company to handle a claim?”

Unfortunately, accidents happen and disasters strike. This is where insurance comes into play. For an insurance company, processing a claim is routine and should be done in a timely manner. As a church, you want to be confident that you’ve made the right decision in choosing a company that will help the congregation get back on track without missing much of a beat.

Furthermore, what kind of service should be expected after a claim has been submitted? An agent should have a better idea of what the process entails and what you, as a customer, will be dealing with in the event of a claim. #5: “What’s your overall recommendation?”

You’ve asked all the right questions, and the agent has provided with you with loads of information — the decision is ultimately yours. However, as an expert in the field, the agent should provide the church with a detailed summary of what was presented and an overall recommendation. This should ultimately include both a coverage package and the total cost, which will hopefully provide the church enough confidence to make the right decision.

Protecting the church is always the ultimate goal. However, through the use of an agent, you can ensure that you’re making a well-informed decision while receiving personalized customer service and knowing they have your best interest at heart.

Deb Rushenberg is Director of Commercial Lines Underwriting at GuideOne Insurance in West Des Moines, IA www.guideone.com, where she is responsible for the overall vision, direction and oversight of underwriting for the Church niche. Rushenberg has been with GuideOne for more than two decades.

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INSURANCE ESSENTIALS

Learn the language How to read and understand your church insurance policy

By Andy Noga

You have just met with your insurance agent to decide what type and amount of insurance coverage will best meet your church’s needs.

But, before you make a decision, it’s important to read and understand the terms and conditions of the policy being offered.

Often, there is additional coverage, or endorsements, that a church can purchase to help better protect itself, and reduce the types of loss excluded under a policy. Since insurance policies are fairly standard and the language of those policies is often approved by the state insurance department where your church is located, amendments to policy forms are typically made by using similarly pre-approved endorsements. An endorsement is “a written document attached to an insurance policy that modifies the policy by changing the coverage afforded under the policy.” Endorsements can add or remove coverage, and understanding how the endorsements to your policy operate is critically important to understanding your church’s insurance protection.

Common insurance terms More often than not, there will be terms within an insurance policy that you might be familiar with, but the meanings of those terms within the insurance policy might be slightly different. It’s important to note that most insurance policies, before being approved, must pass a readability test. This test is designed to ensure that a policy is easy to read and easily understood. However, not all policy provisions are uniform, and knowing the differences in language is critical.

Following are several terms commonly found in church insurance policies.

Deductible — An amount of loss (money) that the insured church must pay before the insurance company begins to make payments. Example: Your church’s insurance deductible is $500, and the church has just been hit by a tornado, causing $2,000 worth of damage. The church would first pay $500, and the insurance company would then pay the remaining balance of $1,500.

Coinsurance — In property insurance, a coinsurance provision requires that the policyholder carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. If the amount of insurance limit acquired is less than the required amount, then the policyholder pays a larger percentage of the loss for being underinsured.

This is often referred to as the “coinsurance penalty.”

If this is the first time your church is purchasing insurance, then you might be unfamiliar with all the insurance jargon, making it difficult to understand what you’re about to buy and what insurance protection you will get for the money. Conversely, even if you’ve heard several of the insurance terms and conditions used in general conversation, you might not fully appreciate what they mean in the context of your policy when it’s called upon to reimburse your church for a loss.

The terms and conditions of an insurance policy provide all the details of your church’s coverage. Insurance policies can be lengthy, and use complex language that’s familiar to insurance companies and agents — but not easily understood by policyholders. Unique policy language is often used as a means for insurance companies to communicate all the details of the coverage being offered in as concise and readable fashion as possible.

There are several key sections that you should know and understand well before agreeing to and accepting an insurance policy.

What’s covered? The insuring agreement and exclusions Most likely, you and your agent have discussed numerous coverage options for your church, price plans and, hopefully, your duties and responsibilities as a church policyholder. The next step is to carefully read the policy to ensure that you understand exactly what’s covered, and excluded.

The “insuring agreement” typically defines what’s covered under a policy, and often defines certain key words used in a policy. The “exclusions” describe what’s not covered under the policy, and it’s important to understand both what is, and is not, covered in the standard form before you buy insurance.

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Claim — A request made by the church for payment of the benefits provided by the policy. This is a formal request or application that’s reported directly to the insurance company. The claim is then reviewed by the insurance company to determine if the loss is covered by the policy, and if covered the claim is then paid, subject to any deductibles or coinsurance being applied.

Insured Value — The maximum amount an insurance company will pay if an insured asset is deemed a total loss. The asset’s insured value can either be its replacement cost or its market value, depending on the provisions of the insurance policy.

Liability Insurance — Protects the church from the risks imposed by lawsuits and similar third-party claims, typically bodily injury claims (for example, slips and falls), in the event that the church is sued by others.

Reading the language of your insurance policy can be tedious and sometimes frustrating. However, understanding what your church is buying — and the financial protection afforded — will better help you to prepare for the unexpected.

Reading and understanding your policy will confirm the insurance limits, who and what is insured, and reduce the risk that you and the congregation will be unpleasantly surprised when disaster strikes.

Andy Noga is Senior Vice President, General Counsel and Corporate Secretary for GuideOne Insurance in West Des Moines, IA. www.guideone.com Noga is responsible for overseeing GuideOne’s Legal, Subrogation and Special Investigation Unit (SIU) Departments.

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INSURANCE ESSENTIALS

The most common church claims — and how to protect against them

By Eric Spacek, JD, ARM If your church is like many others, it probably has a limited budget. Plus, the staff is likely busy with ministry activities, and it is difficult to take on additional responsibilities. This can be an issue when it comes to risk management — improving safety for congregants and enhancing your facility’s security.

As one of the nation’s leading church insurers, GuideOne keeps detailed records about the types of claims and losses churches experience across the United States. Over the last several years, the most common causes of loss are: storms; falls; water damage; theft, burglary and vandalism; accidental fires; lightning and electrical surge damage; recreational activity injuries; arson; sexual misconduct incidents; and maintenance injuries.

The good news is, with little or no extra money, the leaders of your church can make dramatic improvements in the way they protect people and the property. The only requirements are a commitment to safety and security by church leaders and volunteers.

The first step in beginning your church safety and security efforts is to recruit volunteers in order to form a safety or risk management team. Typically, this team is made up of congregation members who have experience in safety, facility or property management, insurance, law enforcement, law, accounting, child care and healthcare. The goal of this team is to identify risks at church and formulate a risk management program.

Once the team is in place, it is important for them to establish a process to make sure that the property and surrounding grounds are regularly inspected for The most common cause of injuries on various hazards. Sample church premises are slips and falls. inspection checklists should be available from your church’s property insurance carrier. Ideally, a qualified professional should look for issues concerning electrical, HVAC, fire prevention and plumbing. The safety or risk management team also should look for the following general items and issues: • Hazards that can cause slips, trips or falls — such as uneven walking surfaces including parking lots, sidewalks and hallways, or worn carpeting • Fire hazards — such as improperly stored combustibles or open flames • Roof damage or debris blocking the gutters, downspouts and eaves • Trees or branches close to the building or electrical wires • Nursery and daycare protective devices — such as outlet coverings churchexecutive.com

• Cleaning supplies and chemicals that are well-marked and locked • Playground equipment that is well-maintained and with sufficient ground cover By addressing these issues ahead of time, it could greatly reduce the chances of experiencing several of the common causes of loss listed above.

Slips and falls The most common cause of injuries on church premises are slips and falls. Churches in areas prone to freezing winter conditions should take snow and ice into consideration. It’s essential to promptly remove the hazard from all sidewalks, stairs and parking lot areas where there is a heavy flow of visitor traffic. Ice-Melt or similar products can be used to minimize the danger of slipping. Your church also can put up “Wet Floor” caution signs in entrances and heavy traffic areas. Also, keep walking surfaces free of tripping hazards such as extension cords, boxes or other items.

Water damage Water damage — from frozen pipes that break, as well as leaking roofs, drain blockages and sewer lines that back up and overflow — is the third most common type of insurance claim among churches.

To minimize the risk, keep the church’s roof in good condition, have gutters cleaned out, and make sure there is adequate insulation and ventilation in attic spaces.

Insulate water pipes that will be exposed to freezing temperatures, Water damage is the third most and regularly inspect the premises. common type of insurance claim Your church also should consider among churches. installing a water leak detection system.

Theft and burglary About one in eight churches is victim to theft or burglary each year. To help prevent crime at your church, follow the “5 Ls.” 1) Lock-up. Make sure doors and windows are locked when the building is unoccupied.

2) Lighting. Illuminate exterior buildings, doors and parking lots from sunset to sunrise.

3) Landscaping. Keep shrubs and trees trimmed around windows and doors, and keep any unsecured tools or ladders from being easily accessible to outsiders.

4) Lookout. Establish a “Church Watch” program and develop relationships with neighbors, asking them to keep an eye on the property and report any suspicious activity.

5) Law enforcement. Develop positive relationships with local police and invite them to patrol the property at odd hours.

Naturally, certain types of losses — such as hurricane or tornado damage — are impossible to avoid. However, research shows that more than half of all losses at churches could have been prevented or minimized if the church would have taken the proper steps and precautions ahead of time to reduce their risks.

For a complete listing of ways to protect your ministry from common church claims, visit: www.guideone.com/SafetyResources/Churches/churchindex.htm.

Eric Spacek, JD, ARM is the Director of Risk Management and Loss Control at GuideOne Insurance www.guideone.com in West Des Moines, IA. Before joining GuideOne, he served as Minister of Operations for a large Methodist church in Raleigh, N.C., and was a liability litigation trial attorney in Washington, D.C. I N S U R A N C E E S S E N T I A L S • CHURCH EXECUTIVE

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INSURANCE ESSENTIALS

What happens after you submit a church insurance claim?

By Dave Sours Accidents happen. Catastrophes are unpredictable. There are many situations a church might encounter that will require submitting an insurance claim.

To a church, the claims process can be overwhelming, as you might have little understanding of what happens behind the scenes.

To offer insight and make the process easier for you and your insurance company, learn about who you’ll be working with, how you can be prepared after submitting a claim, and the settlement timeline.

It’s important to remember you’re not alone during this process, and you should have support to answer any questions and guide you along the way.

In most cases, this will be an insurance adjuster. The adjuster represents the insurance company, and its role is to resolve the customer’s issue and serve as a channel between the customer and insurance company.

Additionally, the adjuster should offer you a better understanding of what to expect during the claims process. You should be informed of what’s required and how to make the course easier for both parties. Items of discussion might include your coverage and the deductible. It’s important to note the adjuster should be your main point of contact during the entire claims process.

What to have ready Because each insurance claim is unique, there isn’t one set list of information you should have prepared for your adjuster. Here are some tips on what to have prepared for common types of claims: Theft: Date of loss; damages sustained; items missing; police report case number; and ownership documents.

Fire: Location of fire; damages sustained; Fire Department involved; and cause of the fire.

Lightning: Date and time of loss; direct strike damage, such as building, trees, etc.; items damaged; detailed evaluation forms from repair technicians noting the cause of damage; and estimated cost of repairs or replacement.

Roof Damage: Loss location; type of damage; indication of interior leaks; age and type of roof; cause of loss; indication of emergency repairs needed; estimate of repairs, if available; and indication of past repairs or claims.

Water Damage: Confirmation of water main turned off; indication of fresh water or sewage; approximate square footage of area affected; and source of the water.

Be prepared with as much detail as possible regarding your claim. The more information you have ready, the less your adjuster will be required to follow up — and the quicker the process will be completed.

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The claims timeline Again, because each claim is different, the timeline won’t be the same for every situation. However, customers can expect to be contacted by an adjuster within two business days after submitting a claim. From there, an adjuster might spend two to five days gathering information for an estimate. The industry average for a property claim to go through the entire process is 16 to 20 days.

The degree of the claim will determine the average time of completing the process. Claims — such as bodily injury, professional liability and specialty losses — will typically require more time and attention from the adjuster.

Making the process easier Handling a loss at your church can be challenging. With the teamwork of the church, insurance company and insurance adjuster, returning to pre-loss operating conditions can be easier. When initially filing your claim, be sure to include all relevant contact information to ensure the adjuster can easily and quickly reach you. Also, identify your preferred method of how they can contact you. Be patient with the adjuster, but also prompt in offering information when it’s requested.

Gaining a better understanding of insurance claims and what it takes to resolve an issue can be helpful in getting your organization through a loss. Remember to be patient and work as a team with your adjuster, and the feelings of stress and worry will disappear.

Dave Sours is Vice President of Claims Operations at GuideOne Insurance [ www.guideone.com ] in West Des Moines, IA, and has been with the company for more than 20 years. He is responsible for managing GuideOne’s claims division, including the company’s field operations. churchexecutive.com