For Mississippi churches, insurance program proves a boon
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Irene Howard |
June 26, 2006
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
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A UMNS file photo by Woody Woodrick United
Methodist Church Property and Casualty Trust is providing housing
assistance for displaced pastors in the Mississippi Conference.
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United
Methodist Church Property and Casualty Trust (PACT) is providing
housing assistance for displaced pastors in the Mississippi Conference
because of Hurricane Katrina. A UMNS file photo by Woody Woodrick.
Photo #06721. Accompanies UMNS story #388. 6/26/06 |
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
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A UMNS file photo by Woody Woodrick Hurricane Katrina washed away all of the pews and the carpet of Leggett Memorial United Methodist Church in Biloxi, Miss.
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Hurricane
Katrina washed away all of the pews and the carpet of Leggett Memorial
United Methodist Church in Biloxi, Miss. United Methodist Church
Property and Casualty Trust (PACT) is handling insurance claims for
Mississippi churches affected by the hurricane, and it is trying to get
them back in service to their communities. Half the roof and the back
wall of the sanctuary are all that remains. The church is on the grounds
of Seashore Assembly and faces the Gulf of Mexico. A UMNS file photo by
Woody Woodrick. Photo # 06722. Accompanies UMNS story #388. 6/26/06 |
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.
News media contact: Tim Tanton, Nashville, Tenn., (615) 742-5470 or newsdesk@umcom.org.
Audio interview with David Stotts |
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