PROPER COVERAGE STANDARDS
Proper coverage standards requirements for United Methodist churches provide a schedule of the coverages and limits that a church should carry to be “adequately” insured.
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Where did these standards come from?
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Why are they important?
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What is required of your church as relates to these requirements?
Let’s take a look at these and other questions around the standards and church insurance in general.
During the 2016 General Conference in Portland, Oregon, Petition 60158 was adopted. The Petition amended ¶ 2533.2 in The Book of Discipline (2012) and altered the responsibilities of the local churches board of the trustees as they relate to the annual review and reporting of the church’s insurance coverage. It states:
The board of trustees shall annually compare the existence and adequacy of the church’s insurance coverages to an insurance schedule annually published by the General Council on Finance and Administration (GCFA). The purpose of this review is to ensure that the church, its properties, and its personnel are properly protected against risks. The board shall include in its report to the charge conference (¶ 2550.7) the results of its review and recommendations needed to timely bring the church into compliance with the published schedule.
The proper coverage standards were developed by GCFA, United Methodist Insurance (UMI), and its service provider in 2016. These were developed based on the exposures faced by individual churches, industry best practices, and the professional assessments by of UMI and its partners’ experts. They can change based on emerging risks, new coverage options, the careful consideration of the advice of experts, the needs of individual churches, and other legal and market factors. In May of 2019, the standards were adjusted to consider the coverage needed by smaller churches for misconduct coverage and the need for some churches to carry actual cash value property coverage until their property can be rehabilitated to allow for replacement coverage as an option.
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We hope this helps you understand the importance of ensuring that your church is adequately protected against loss. Having proper coverage can prevent significant harm to your ability to continue your ministry effectively. A copy of the most recent requirements can be found on GCFA’s website.