Thoughtful stewardship of church resources begins in your church business office. Are you managing the many gifts God has given your church in the most responsible way?
If your church sustained losses from a fire or other disaster, would you be able to rebuild and replace everything or would you lose facilities and/or resources because your insurance is inadequate? Would your worship and important ministries suffer?
These are tough questions which must be asked, especially in light of the turbulent time surrounding the insurance industry. If church leaders don't ask and answer these questions, who else will?
Churches are certainly susceptible to all the same hazards as any other building, including fires, floods, tornadoes and hurricanes. However, churches are at greater risk of sustaining compounded losses because they are, by sheer definition and purpose, vulnerable and because they usually contain highly valuable items such as choir robes, musical instruments, and computer equipment.
Further, churches are most often underinsured because their contents' coverage is usually equal to only 10 percent (sometimes as much as 19 percent) of the bricks-and-mortar coverage. This means the facility's contents are drastically underinsured; the problem is exacerbated if the bricks-and-mortar coverage is inadequate, another all-too-common situation.
According to the Church Threat Assessment Guide developed by the National Church Arson Task Force in 1996, churches are advised to "duplicate all documents, computer disks and records that are stored at the church (and) complete a comprehensive inventory of all furniture and equipment, to include serial numbers and value."
This guide was developed in response to the tremendous number of churches that suffered arson-related fires in 1995 and 1996.
The insurance claim process is set up so that it's incumbent on the client, whether a homeowner or church administrator, to prove that he or she actually had the item before restitution is made and to provide documentation that shows description, condition and value.
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Once all property is documented, it is vital to understand the insurance risk. Copious documentation will not help you recover the $650,000 in contents you lost if your insurance coverage is limited to $250,000, for example. An aggregate valuation, a total professional valuation of church property using insurance replacement costs, is the best indicator of how much money is required to make the church whole in the event of a loss.
An aggregate valuation tells you the value of the inventoried church contents and determines, without a doubt, how much insurance coverage is required to adequately protect your church property.
An insurance agent must also be aware of and know values for items of exceptional worth. This is especially important for houses of worship because they are often benefactors of expensive gifts, such as artwork, antiques, stained glass windows, and musical instruments. Without accurate individual valuations and appraisals for these items, the true value of the property remains unknown and the insurance agent cannot write a policy that provides proper coverage.
As a further layer of protection and asset management, some churches may also consider using customized barcode labels and asset tracking software to easily and quickly identify and track assets. Customized barcode labels deter thefts, aid in recovery of lost or stolen items and end the "misplacing" of valuable equipment.
Knowing the value of your church, and being able to protect its ministries, assets and the people its serves should be based on fact, not fiction. Complete documentation of property and appropriate insurance coverage promote responsible stewardship of church resources.
Asset Verification, Inc. provides tools that promote responsible stewardship of church resources.
