Conference finds insurance thanks to PACT

1/18/2006

By Woody Woodrick
Advocate Editor

Adopted as a shield against liability, UM PACT is proving to be just as beneficial for property insurance for United Methodist churches in the Mississippi Conference.

UM PACT, adopted as the conference insurance program at an October special session of Annual Conference, has helped the Mississippi Conference obtain property insurance that otherwise would not have been available in the aftermath of Hurricane Katrina.

“We’re happy UM PACT was able to find us coverage because our efforts did not turn up any company willing or able to insure the entire state,” said David Stotts, conference treasurer.

Stotts said the conference insurance committee and Board of Trustees talked to more than 25 companies before reaching a deal with Zurich North America. All other companies approached either declined to offer any coverage or only wanted to cover the northern half of the state.

Five United Methodist churches and one parsonage sustained catastrophic damage in the Aug. 29 storm, while another 17 churches and 13 parsonages suffered major damage. Twenty-eight pastors’ homes were rendered uninhabitable. Gulfside Assembly was leveled. Seashore Assembly and Moore Community House in Biloxi sustained major damage. Numerous churches in the southern part of the state sustained at least some damage.

“If we had not had the called session in October, I fear our churches on the Coast and small churches covered by volunteer fire departments would not have been able to find affordable coverage,” Stotts said.

The Rev. Henderson Rasberry, chair of the Board of Trustees, pointed out that while some individual churches might have been able to obtain coverage at lower rates, the purpose of UM PACT is to make sure that all churches in the conference are able to have insurance.

“If everybody stays faithful helping our brothers and sisters across the state, then all of our churches can have insurance,” he said. “We are very committed to each other. What happens to one of us happens to all of us in a faith community.”

UM PACT was formed in 2005 among several United Methodist conferences to help churches obtain property and liability insurance that otherwise might not be available. The Mississippi Conference was among the first to join UM PACT in January 2005, and then the company became the entire conference’s insurer in October.

As it stands, the cost of insurance coverage will go up in 2006. Stott said the increase will vary from church to church but will average about 39 percent. He compared that increase to the Florida Conference, which faces a 55 percent increase this year and has totaled cost increase of 89 percent over the past three years.

In a letter being sent to Mississippi Conference churches, four coverage changes and an enforcement change are listed:

  • The deductible is decreased except in named storms and flood damage to $2,500 with the conference contingency fund covering $1,500. The conference contingency fund will establish a self-insured retention fund for coverage of the first $500,000 of claims.
  • Wind coverage including hail damages for the six counties in Tier 1 (Hancock, Harrison, George, Stone, Pearl River and Jackson) is scheduled to expire within 60 days. There is no wind coverage for a named storm in Tier 1. Each affected church will receive a quote on alternative coverage from our risk manager.
  • The $1,000,000 flood coverage will no longer apply to the six counties in Tier 1. Premium quotes from the National Flood Insurance are available upon request from the risk manager.
  • A deductible of 5 percent of total insured value (TIV) for wind coverage for a named storm is in place in the counties of Wilkinson, Amite, Pike, Walthall, Marion, Forrest, Perry and Green.  A 2 percent deductible of TIV in a named storm is in place for the rest of the state.