How to Save Money on Insurance
As a group of churches under one policy it’s important to remember that when we act collectively for good we can make significant and meaningful change. If each Adventist site commits to taking these actions we could see a positive net effect on the property insurance program.
Tip #1 – Don’t pay for cover you don’t need.
Seems obvious that you wouldn’t want to pay for something you don’t need, however, when last did you check your Adventist site’s Certificate of Cover?
You may find items of property, contents or extra risks that the site no longer owns because the property was sold, stolen, replaced or lost. Or perhaps low-value items are still listed which no longer need cover. Over the years churches can accumulate a lot of redundant equipment.
Audit your list of property, contents and extra risk, at least annually. You can talk to RMS at any time of the year to make alterations to your property certificate to realise immediate savings.
Tip #2 – Don’t rely on indexation – choose to set accurate replacement values.
As per point 1 above, your contents value may not need to be as high as it is. If no one has updated the contents value in several years, you may be paying too much.
Further, indexation alone may not keep up with the current reinstatement value of buildings and site improvements, risking under-insurance. Review your certificate annually.
Tip #3 – Don’t be tempted to claim more than you deserve.
If you’re in the process of a claim for a covered loss event, especially one that caused widespread damage, it may be tempting to claim a few extra items that weren’t necessarily damaged by the event.
Not only is this practice in direct conflict with our values as a Christian organisation, there’s a greater cost that we all pay for…including the Adventist church.
It is called ‘social inflation’.
When insurers are setting their prices and terms for a new period they factor in the total value of claims from the previous year.
In recent years, we’ve endured sharp increases in premiums, increased deductibles (excess) and reductions in what insurers are willing to cover – this is the result of several catastrophic weather events that are clearly out of our control. However, we can control what we actually claim.
While claiming ‘a little extra’ might result in a short-term bonus for your site, long-term it ends up hitting the hip pockets of every site in our sisterhood of churches, including your local churches struggling to make ends meet – that impacts ministry and mission.
Tip #4 – Avoid the ‘moral hazard’.
A moral hazard occurs when an individual, or an organisation, with insurance engages in risky behaviour, or fails to act in good faith, because they assume that if something happens their insurance will cover the cost anyway.
An example of a moral hazard would be knowing that a roof is in need of some maintenance, maybe a couple of tiles need replacing, or there is a blocked downpipe but instead of taking due care to prevent a potential loss, the site intentionally avoids rectifying the issue. Unfortunately, when the next major weather event hits, that small problem could result in a much bigger claim for damage.
We don’t enjoy being negative, but anyone who takes a cavalier attitude to real hazards because “insurance will fix it” should not be shocked by their premium going up …or having a claim denied. Refer to tip #3 as to why.
Which leads us to tip #5…
Tip #5 – Loss equals costs! Reduce your risks.
It is really simple: Adventist communities that take steps to reduce the likelihood of loss will enjoy:
- less claims,
- less excess costs,
- less disruption of ministry,
- less time dealing with insurance, and
- more time engaged in ministry and fulfilling mission.
We can’t prevent every peril, but there are things you can do to reduce the quantum or total cost of a loss.
We’ve seen time and again the result of a loss that could have been avoided. Avoidable loss unnecessarily impedes ministry, impacts mission, and ends up costing you hours in dealing with insurance paperwork, emails and restoration work – all of which could have been greatly reduced or prevented by spending a little on risk reduction and improving resilience.
You can build better immunity into your Adventist site by setting aside funds for security measures, fire detection systems, electrical safety, hazard reduction and site maintenance. While site maintenance is the financial responsibility of an Adventist site, RMS can help with co-funding for genuine risk and safety projects.
Taking a proactive approach to risks will safeguard mission and ministry, as well as contribute to long-term cost savings for the whole Adventist organisation.
Tip #6 – Read and engage with your renewal notice, correspondence and communication from RMS.
Granted it takes time to read and understand insurance wording, so if there’s anything unclear in any of our communication with you please just call us. We will happily explain terminology, what is and is not covered and any other questions you may have. We’re available and here for you.
We do our best to provide clear and transparent information in our annual renewal letter to you, your site’s certificate of cover and on our website.
In summary, immediate savings can be realised by checking what is listed on your property certificate and removing items that don’t need cover. Big picture, by claiming only what you truly deserve, being careful and proactive in rectifying hazards, and keeping a well-maintained and secure site will bring long-term cost benefits for you and your Adventist site.