When reviewing church financial records to prepare their annual report, we constantly look for ways in which the church can reduce costs. Any area where a cost savings can be realized allows more money to be available for ministry, outreach, growth plans, etc.
One of the areas we often find a church can save money is in the church property, casualty and liability insurance. Many times the policy carries a small deductible of $500 or $1,000. We suggest that the church inquire how much the premiums would be reduced if the deductible were increased to $2,500 or $5,000. Often, the savings in premiums from increasing the deductible offsets any potential out-of-pocket exposure over just a few years.
If the difference in the premium isn’t significant, then it doesn’t make as much sense to have the higher deductible. However, many churches have never or very rarely have a claim, so the savings add up over time. If you do raise the deductible, make sure that you keep enough cash available should you have a loss.
Lastly, it is best to reserve turning in a claim for only larger losses. If the church has a small loss and can pay for it out of pocket, it is best to do so. Turning in several small claims often results in higher premiums or getting a non-renewal notice.