Pricing of many products and/or services is based on the principle of supply, demand and competition.

Church insurance is not a widely available commodity so it should not come as a great surprise that pricing can be extremely variable. This can be due to the historic lack of a competitive marketplace and a limited number of providers to this highly specialist sector.

The property damage excess is the amount the insurer can deduct from any claim for loss or damage to buildings, contents or property that is insured away from your premises.

Typically, a policy will have a minimum compulsory excess, but you can choose a higher amount that results in a premium discount. As the insurer usually provides the discount in the form of a percentage reduction, then the higher your base property damage premium the larger the premium reduction. In simple terms, the larger the church, the larger the potential savings could be for an increased excess.

Churches are fairly unique premises when it comes to property insurance, as they can have the opportunity to be insured for sums that do not represent the full ‘insurance values’ of their buildings and contents. This may be due to the fact that fully repairing or restoring a parish church and its contents might not always be sanctioned by your diocese following major damage.

In some cases, major damage may lead to the decision to replace the church with a modern building or close it altogether. When selecting the appropriate level of cover, this should be taken into consideration. Typically, the level of cover available are 25%, 50%, 75% or 100% of the insurance values for both the buildings and contents (you cannot mix and match levels of cover on a single premises).

The Trinitas church insurance policy does not include an underinsurance clause, sometimes known as an ‘average’ clause. This means that the amount offered in settlement of your claim will not be reduced by the level of cover. However, any claim will be capped at the sums insured, which could be lower than the potential cost of fully repairing, restoring, replacing or reinstating the buildings and/or its contents. For further details can be found in our policy document. (link to policy document)

It is important to note that as your claim is not proportionally reduced, then neither is the premium on the property damage section of your policy. For example, a church with a total insurance value of £10m at a 50% level of cover should cost more to insure than a church with a £5m total insurance value at a 100% level of cover.

If a building sum insured is selected that represents 25% of the total cost of repair/restoration or reinstatement of the specified building, this will be inadequate in the event of a significant damage. It will meet minor damage claims but in the event of significant damage caused by fire, for example, it will only be sufficient to make safe the ruin or clear the site.

If you select a contents sum insured that represents less than 100% of the total cost or repair or replacement with items of similar quality, then in the event of a loss of all or a significant proportion of your contents you may need to compromise on the quality of replacement items and/or the number of items you replace or repair.

The selection of your sum insured is a decision for the PCC and you should only consider insuring for less than 100% of the full insurance value after careful and informed consideration and having a clear understanding of what your plan would be following major damage to you building and the amount of funding you will need to achieve your future objectives for the repair, restoration or replacement of the building and replacement or repair of its contents.

The building sum insured under item one represents 100% of the total cost of repair/restoration or reinstatement of the specified building as applicable. The sum insured should be reflective of the cost to rebuild or repair and restore, including all associated costs such as site clearance, architects and surveyors’ fees, planning fees, current local authority requirements and VAT (where applicable). Insuring on this basis would allow for full restoration or reconstruction following the most serious damage as a consequence of, for example, a major fire.

If a building sum insured is selected that represents 75% of the total cost of repair/restoration or reinstatement of the specified building as applicable it may be inadequate in the event of significant damage. You may need to compromise by using cheaper modern materials and building methods.

If a building sum insured is selected that represents 50% of the total cost of repair/restoration or reinstatement of the specified building as applicable it will be inadequate in the event of significant damage. It will meet minor damage claims but in the event of significant damage caused by fire, for example, it will only be sufficient to make safe the ruin or clear the site, and to provide funds for a much simpler and smaller building such as a multi-purpose hall.

On some policy schedules some covers may not be shown as ‘uninsured’ and these can include cover for subsidence, heave & land slip, terrorism, money & assault, theft by officials, legal expenses or personal accident.

Some church insurance policies do have options to take lower limits of cover on some sections. In the case of Trinitas’ church policy this includes the income protection and the trustee's indemnity sections.

For income protection you can select a sum insured of either £50,000, £100,000, £175,000, £250,000 or £500,000 and an indemnity period of 24 months, 36 months or 48 months. The higher the sum insured and/or longer the indemnity period the higher the premium is.

Church insurance is typically sold as a ‘package policy’, that is a policy that contains different sections of cover which provide for the common insurance requirements of most parishes and when combined are at a more competitive price than having specific, bespoke or stand-alone covers on different policies.

Unless there is a significant saving it can be a ‘false economy’ to maintain or select limited property damage insured events or other available insurance cover sections as any uninsured loss may need to be met from parish funds.

Long Term Agreements (LTA’s) and Long-Term Undertakings (LTU’s) are supplementary contractual clauses where you agree to renew your policy for a set number of years in return for a premium discount and the insurer agrees to maintain your premium and cover within the limits of the supplementary clause.

The wordings of LTA’s and LTU’s differ from one insurer to another with some granting an option to pay an early withdrawal fee if you wish to leave before the end of the agreed period. Others do not grant such an option, and you will not being able to seek alternative quotations before the end of the agreed period.

Typically an LTA or LTU has a duration of 3 or 5 years but for most the insurer retains the right to break their agreement at any renewal with the only penalty on the insurer being that you are granted the opportunity at that renewal only to take your insurance to another provider without penalty.

Trinitas have pioneered a combined policy for parish insurance with our policy being able to insure any number of churches, church halls, parish owned houses and sometimes other parish properties on a single policy and offering significant saving over having separate policies.

It is important to note that it is only possible for us to offer a single policy where there is only a single Parish Church Council (PCC). If there are two separate PCC’s, even if they are closely associated and within the same benefice with the same incumbent, a single policy cannot be offered. If two churches have the same PCC but separate District Church Councils (DCCs), Local Church Councils (LCCs) or similar they can still benefit from being insured on a single policy as DCCs and LCCs have no legal entity in their own right, but are considered as just sub-committees of the PCC legal entity

Church Insurance Providers incur a number of different costs in order to trade successfully which need to be paid for by your premiums, one not insignificant cost is that of marketing to attract new clients. Trinitas Church Insurance are willing to offer preferential rates for groups of parishes who register for quotations.

‘Group Arrangements’ as we call them are typically organised for benefices or deanery groups with a local co-ordinator within those groups helping to compile the list of renewal dates, LTA/LTU expiry dates plus individual contacts for each parish. In most cases there will be a range of expiry dates of the current individual policies so the process of quoting may initially run over a number of years.

Group Arrangements will still be on the basis of separate policies for each PCC and policy expiry dates do not need to be made common. The application of preferential rates is only dependent on us being given the opportunity to quote; not the take up our quotation or remaining insured with us thereafter. As it is not a contractual clause it does not carry any conditions or guarantees on either party.