Don’t be blindsided by an unseen crisis
Accurate and updated building valuations can preserve your facility’s future.
By Fritz Hahn
It’s a memorable day for your house of worship. And not in a good way.
When the phone rings, a fire chief is on the line explaining that your building has been destroyed. It’s a day you never thought would come. After making sure no one was hurt, your next thought is likely insurance. “Where is that policy? What does it say? Am I covered? For how much?”
The destruction of a facility would give anyone anxiety. But one thing you don’t have to be stressed about is the insurance value of your building.
“Your building valuation is the amount for which your building and its contents are covered.”
A valuation is important because you have a role in determining its accuracy. A property’s worth is based on the information your organization provides to its insurer. Yet often this data is incomplete or outdated – and that’s a serious problem.
Industry surveys and government data show the vast majority of commercial buildings (including houses of worship) are undervalued for insurance purposes. That means these buildings are insured for less than they’re worth, adding another layer of crisis to the loss of a building. Not only has your facility been destroyed, but your insurance will not pay enough to rebuild it.
What’s the disconnect?
Property insurance policies are often signed and then consigned to a file cabinet, never to be reviewed again. Meanwhile, property is always changing. Improvements and expansions are made. Roofs are replaced and parking lots are repaired. But unless this data is updated in your insurance contract, it won’t be reflected in your payout.
But there’s good news: It doesn’t have to be this way. A professional building valuation surveys your property and its contents and compares them to the data in your insurance policy. In this process, omissions are corrected. Errors are fixed. Current costs are factored in. The updated state of your property is then reflected in your insurance policy.
Obtaining an insurance settlement and rebuilding after a loss will never be a perfect process. But by paying attention to details you can control, your outcome can be much more satisfying.
Fritz Hahn is the founder of Ministry Pacific Insurance Services.
Learn more about building valuations
Ministry Pacific now partners with AccuValuations, which provides building valuation services for houses of worship and nonprofit organizations.
We also invite you to download our free e-book, The Church and Nonprofit Valuation Guide, and to view our short overview video on building valuations.
