That made for a difficult conversation at a church business meeting and midyear changes to the church’s budget. The church was able to tap some reserves to cover the increased premium this year. But it’ll likely be paying higher rates for the next three to five years, said Pihl. And those reserves, meant to pay for things like a new roof, still have to be built back up.
Pihl said that before the church’s policy was canceled, he expected rates to go up, perhaps by 10 percent or 20 percent. But that proved overly optimistic.
“It’s just a terrible market,” he said.
Nathan Creitz, pastor of Calvary Baptist Church in Bay Shore, N.Y., a congregation of about 100 people on Long Island, said that in the past, getting insurance hadn’t been a worry. The total annual cost for all the church’s insurance — the church building, a parsonage, liability — was less than $4,000.
“We got lucky,” he said. “We were grandfathered into some really low rates.”
Things changed last summer after Calvary’s insurance carrier dropped the church, deciding not to renew the policy. With the help of a broker, the church found new insurance for about $14,000. Since most of the costs of running a church, such as paying staff and keeping the lights on, are already fixed, that meant cutting programs. The church also had to put off capital improvements to the building, which ironically are the kinds of things that would make them easier to insure.