For Mississippi churches, insurance program proves a boon
A UMNS Report By Ciona D. Rouse*
Reeling from the impact of Hurricane Katrina, many United Methodist churches in Mississippi received quick help from the denomination's Property and Casualty Trust.
Two days after the hurricane, the Mississippi Annual (regional) Conference was contacted by PACT's chief executive officer, Irene Howard. Within two weeks, the insurance program sent $1.3 million to the conference to help pay salaries for displaced pastors and lay staff and to assist with debris removal.
"I'd never heard of an insurance company advancing you that kind of money," said David Stotts, director of financial administration for the conference. "… If it had not been for PACT, there would have been no way to work with the churches to handle their claims."
The Mississippi Conference submitted nearly 300 claims in the month following Hurricane Katrina. The conference had become an owner in PACT in January 2005 - the first of 15 conferences to do so.
In an October report, Howard described PACT's initial response to the hurricane.
"In partnership with the Mississippi Conference and the United Methodist Committee on Relief, PACT has prioritized to assist in providing temporary housing and compensation for displaced pastors, to help re-establish church day care centers, and to aid in getting churches back in service to affected communities," she said.
PACT is an "insurance captive" working with Zurich Insurance Group to provide property, general liability, automobile liability and workers' compensations coverage specifically for churches and church-related institutions. Being a captive company means PACT is owned by the members that it insures - in this case, the annual conferences that belong to it. It is administered through the United Methodist General Council on Finance and Administration in Nashville.
"In a catastrophe like Katrina, we pay the first $1 million of loss," Howard said. PACT gives the church control and enables it to ensure no one is excluded. "Those decisions are left to us and not to a for-profit carrier. It allows us to extend coverage where coverage was heretofore unaffordable or unavailable."
Special session
The Mississippi Conference had 368 claims stemming from the hurricanes, and the losses could end up approaching $30 million, Stotts said.
About five church buildings, including Gulfside Retreat Center and Seashore Assembly, were destroyed in the hurricane, which hit the Gulf Coast early Aug. 29. The cost of loss for these five buildings is approximately $10.5 million.
Howard and Bill Barham, PACT administrator for the Mississippi Conference, accompanied Bishop Hope Morgan Ward and other conference and general church leaders on an early September visit to the coast to talk with pastors at affected churches. A team of 11 adjusters, specifically trained to work with church property claims, went to the area as soon as travel was permitted.
Not all Mississippi churches are members of PACT; each individual church can choose whether or not to belong. At a special session in October, Mississippi United Methodists voted to have conferencewide coverage through the program. Out of 1,200 people at the meeting, only three cast dissenting votes, Stotts said.
When Katrina struck, the conference had about 700 churches in the program, he said. Now, it has about 1,000 out of a total of 1,148 churches covered by PACT. Other churches have said they'll move when their existing coverage expires, he said.
(In Louisiana, about 30 churches statewide were in the program at the time of the hurricane, Howard said.)
PACT provides full property and casualty coverage, and the conference has its workers' compensation and auto insurance covered by another company. Even with that coverage, the Mississippi Conference still has six counties where its churches have no wind or flood coverage. Zurich was the only company that would write insurance for the churches in those counties, excluding wind coverage, Stotts said.
Strength in numbers
Mt. Zion United Methodist Church in De Lisle, Miss., joined PACT when the conference did. The Rev. Rosemary Williams, pastor of Mt. Zion, was happy to hear that PACT assisted the conference to provide pastors who suffered a loss of income after the storm.
While her church did not experience extensive damage, Williams said the adjusters visited, and she believed it would be beneficial in the end to be a member of PACT.
"I think it makes us stronger as a church to be a part of PACT because it unifies us, since we're a connectional church," said Williams. "It allows larger churches to assist our smaller churches who may not be able to financially afford the high price of insurance by us all being insured together. It makes our premium rate lower."
The Rev. Bruce Taylor of First United Methodist Church in Pascagoula, Miss., appreciates such unity. His congregation was not a member when Hurricane Katrina moved through but was interested in joining.
"There is strength in numbers. As we fight and struggle with the insurance, it would be nice to know that we're a part of a group of people rather than us by ourselves against a big insurance company," Taylor said.
First Church had nine feet of water in its education wing and five feet of water in its Christian life center, and the parsonage suffered so much loss that it will need to be demolished, Taylor said. The church, which had only a little bit of flood insurance, is now in dispute with its for-profit insurance carrier about flood damage versus wind damage. Many churches have the same issue.
Taylor recognized that similar debates happen even for PACT members, but he said that with PACT, his congregation would have advocates and would not have to go through the debate on its own.
A ministry approach
Taylor said he feels most comfortable with PACT's approach to its work as a ministry helping to get churches back in operation as soon as possible.
"The bottom line in this case, I believe, is ministry and not the dollar sign," he said.
With all of his professional losses, Taylor said, he would have recovered at least some of his ministry tools through PACT. His 2,000 books in the church were damaged, and the current insurance carrier would not cover the loss, which he estimates at $25,000.
"They're fighting real hard right now and working real hard to make sure that the churches receive appropriate settlements," he said of PACT.
Looking at what the program can do for the church, Stotts said he believes PACT is the way the denomination needs to move.
Information about the program is available by calling the United Methodist Property and Casualty Trust Service Center at 1-877-UMC-PACT (862-7228).
*Rouse is a freelance writer in Nashville, Tenn. Tim Tanton with UMNS contributed to this report.
Reeling from the impact of Hurricane Katrina, many United Methodist churches in Mississippi received quick help from the denomination's Property and Casualty Trust.
Two days after the hurricane, the Mississippi Annual (regional) Conference was contacted by PACT's chief executive officer, Irene Howard. Within two weeks, the insurance program sent $1.3 million to the conference to help pay salaries for displaced pastors and lay staff and to assist with debris removal.
"I'd never heard of an insurance company advancing you that kind of money," said David Stotts, director of financial administration for the conference. "… If it had not been for PACT, there would have been no way to work with the churches to handle their claims."
The Mississippi Conference submitted nearly 300 claims in the month following Hurricane Katrina. The conference had become an owner in PACT in January 2005 - the first of 15 conferences to do so.
In an October report, Howard described PACT's initial response to the hurricane.
"In partnership with the Mississippi Conference and the United Methodist Committee on Relief, PACT has prioritized to assist in providing temporary housing and compensation for displaced pastors, to help re-establish church day care centers, and to aid in getting churches back in service to affected communities," she said.
PACT is an "insurance captive" working with Zurich Insurance Group to provide property, general liability, automobile liability and workers' compensations coverage specifically for churches and church-related institutions. Being a captive company means PACT is owned by the members that it insures - in this case, the annual conferences that belong to it. It is administered through the United Methodist General Council on Finance and Administration in Nashville.
"In a catastrophe like Katrina, we pay the first $1 million of loss," Howard said. PACT gives the church control and enables it to ensure no one is excluded. "Those decisions are left to us and not to a for-profit carrier. It allows us to extend coverage where coverage was heretofore unaffordable or unavailable."
Special session
The Mississippi Conference had 368 claims stemming from the hurricanes, and the losses could end up approaching $30 million, Stotts said.
About five church buildings, including Gulfside Retreat Center and Seashore Assembly, were destroyed in the hurricane, which hit the Gulf Coast early Aug. 29. The cost of loss for these five buildings is approximately $10.5 million.
Howard and Bill Barham, PACT administrator for the Mississippi Conference, accompanied Bishop Hope Morgan Ward and other conference and general church leaders on an early September visit to the coast to talk with pastors at affected churches. A team of 11 adjusters, specifically trained to work with church property claims, went to the area as soon as travel was permitted.
Not all Mississippi churches are members of PACT; each individual church can choose whether or not to belong. At a special session in October, Mississippi United Methodists voted to have conferencewide coverage through the program. Out of 1,200 people at the meeting, only three cast dissenting votes, Stotts said.
When Katrina struck, the conference had about 700 churches in the program, he said. Now, it has about 1,000 out of a total of 1,148 churches covered by PACT. Other churches have said they'll move when their existing coverage expires, he said.
(In Louisiana, about 30 churches statewide were in the program at the time of the hurricane, Howard said.)
PACT provides full property and casualty coverage, and the conference has its workers' compensation and auto insurance covered by another company. Even with that coverage, the Mississippi Conference still has six counties where its churches have no wind or flood coverage. Zurich was the only company that would write insurance for the churches in those counties, excluding wind coverage, Stotts said.
Strength in numbers
Mt. Zion United Methodist Church in De Lisle, Miss., joined PACT when the conference did. The Rev. Rosemary Williams, pastor of Mt. Zion, was happy to hear that PACT assisted the conference to provide pastors who suffered a loss of income after the storm.
While her church did not experience extensive damage, Williams said the adjusters visited, and she believed it would be beneficial in the end to be a member of PACT.
"I think it makes us stronger as a church to be a part of PACT because it unifies us, since we're a connectional church," said Williams. "It allows larger churches to assist our smaller churches who may not be able to financially afford the high price of insurance by us all being insured together. It makes our premium rate lower."
The Rev. Bruce Taylor of First United Methodist Church in Pascagoula, Miss., appreciates such unity. His congregation was not a member when Hurricane Katrina moved through but was interested in joining.
"There is strength in numbers. As we fight and struggle with the insurance, it would be nice to know that we're a part of a group of people rather than us by ourselves against a big insurance company," Taylor said.
First Church had nine feet of water in its education wing and five feet of water in its Christian life center, and the parsonage suffered so much loss that it will need to be demolished, Taylor said. The church, which had only a little bit of flood insurance, is now in dispute with its for-profit insurance carrier about flood damage versus wind damage. Many churches have the same issue.
Taylor recognized that similar debates happen even for PACT members, but he said that with PACT, his congregation would have advocates and would not have to go through the debate on its own.
A ministry approach
Taylor said he feels most comfortable with PACT's approach to its work as a ministry helping to get churches back in operation as soon as possible.
"The bottom line in this case, I believe, is ministry and not the dollar sign," he said.
With all of his professional losses, Taylor said, he would have recovered at least some of his ministry tools through PACT. His 2,000 books in the church were damaged, and the current insurance carrier would not cover the loss, which he estimates at $25,000.
"They're fighting real hard right now and working real hard to make sure that the churches receive appropriate settlements," he said of PACT.
Looking at what the program can do for the church, Stotts said he believes PACT is the way the denomination needs to move.
Information about the program is available by calling the United Methodist Property and Casualty Trust Service Center at 1-877-UMC-PACT (862-7228).
*Rouse is a freelance writer in Nashville, Tenn. Tim Tanton with UMNS contributed to this report.
