Church Insurance

Churches are one of the hardest classes of business to insure well right now. Carriers that specialized in religious organizations for decades have pulled back, nonrenewed congregations, or raised rates sharply since 2023, and the hail and wind that drive homeowners rates in Nebraska and Iowa hit sanctuary roofs just as hard. A church that has not had its program reviewed in three or four years is very likely paying more than it should, carrying less than it thinks, or both.

What does church insurance cover?

There is no single "church policy." A properly built program for a congregation is a package of coverages, each answering a different question. The ones we place most often for churches in Pottawattamie, Sarpy, Douglas and Harrison counties:

Property insurance covers the sanctuary, fellowship hall, education wing, parsonage, contents, stained glass, pipe organ, sound and video equipment, and the steeple. The two numbers that matter most are the replacement cost limit on the building and the wind/hail deductible, and both are covered in detail below.

General liability responds when a visitor slips on an icy step, a child is hurt at vacation Bible school, or someone is injured at a church-sponsored event off premises. Limits of $1 million per occurrence and $2 million aggregate are standard; many congregations should carry more through an umbrella.

Abuse and molestation coverage is the single most important liability coverage a church can buy, and the one most often missing or sublimited on older policies. It is written as a separate coverage part with its own limit, and carriers require a written screening and supervision policy for anyone working with children or vulnerable adults before they will offer it.

Directors and officers (D&O) protects elders, deacons, trustees and council members from personal liability for decisions made on the church's behalf: a disputed termination, a contested building project, a member who sues over how funds were handled.

Pastoral professional liability covers counseling and advice given by clergy and staff in a ministerial role, which general liability excludes.

Church auto covers owned vans and buses, and hired and non-owned auto covers the far more common situation where a volunteer drives their own car to transport youth or seniors. If a volunteer causes a serious accident on the way to camp, the church is almost always named in the suit.

Workers' compensation for paid staff, including pastors, is required in both Nebraska and Iowa once a church has employees, with narrow exceptions. Volunteers are generally not covered by workers' compensation, so we pair it with a volunteer accident policy.

Crime and fidelity covers theft of offerings and embezzlement by a trusted insider, which is the most common financial loss churches actually suffer. Most carriers now also offer cyber coverage for online giving platforms and member data.

Umbrella liability sits over general liability, auto and employer's liability, and is where a congregation buys the limits that match the size of a bad outcome rather than the size of its budget.

Depending on the ministry, we also add daycare and preschool liability, special events coverage, foreign travel and missionary coverage for overseas trips, equipment breakdown for HVAC and the organ, and ordinance or law coverage for older buildings that would have to be rebuilt to current code.

Why are church insurance rates going up so much?

Four things happened at once. Severe storms across the Midwest, rising rebuild costs, pressure from reinsurers and the cost of liability claims combined into what one church finance chair called "a terrible market," according to a July 2024 report from Religion News Service carried by the Insurance Journal. In that report, one congregation's premium went from $23,000 to $80,000 after being dropped by its longtime carrier, and hundreds of United Methodist churches, including congregations in Iowa, lost property coverage with about a month's notice.

The specialty church carriers took the brunt of it. Church Mutual nonrenewed policies and was placed under review by AM Best, and Brotherhood Mutual's financial strength rating was downgraded, per the same report. That matters for a congregation in Council Bluffs or Papillion because the "church specialist" that wrote the policy for 20 years may no longer be the most stable or competitive option.

This is exactly the situation an independent agency exists for. We represent standard commercial carriers, including Auto-Owners, that write religious institutions alongside the specialty markets, so when one carrier retreats we can move a church rather than simply deliver the rate increase.

What are the most common church insurance claims?

Wind and hail are the most frequent church property claims, fire is the most expensive, and water damage from burst pipes ranks near the top of both lists, according to Glatfelter Religious Practice. Three things we see on church policies in the metro that boards do not expect:

1. The building is insured for what it cost, not what it would cost to rebuild. A sanctuary built in 1965 for $400,000 may cost $4 million or more to replace with comparable masonry, stained glass and a steeple. Many church policies carry a limit that was set decades ago and nudged up a few percent a year. We run a replacement cost valuation on every church building we quote, and we show the board the number before they decide how much of it to insure.

2. The wind/hail deductible is a percentage, not a dollar amount. A 2% wind/hail deductible on a $3 million sanctuary is $60,000 out of the church's pocket before the carrier pays anything on a hail claim. Some carriers offer a flat dollar deductible instead. That is a question to settle at renewal, not after the storm.

3. Older policies have no abuse coverage, or a $25,000 sublimit buried in the liability form. Boards are often shocked to learn what their policy actually says. We read the form and show them.

What does a church need before a carrier will quote it?

Carriers writing churches today ask for more than a square footage and a roof year. To get competitive terms, a congregation should have in hand:

• A written child and youth protection policy with background checks, the two-adult rule and a reporting procedure. Without this, abuse coverage is either unavailable or limited.
• Roof age and material for each building, and the date of the last update to electrical, plumbing and HVAC.
• A current list of owned vehicles and the drivers who operate them, plus a driver screening process for volunteers.
• Payroll by class for workers' compensation, and a count of volunteers for the accident policy.
• Financial controls: who counts the offering, who signs checks, and whether two people are involved in each.
• Any daycare, preschool, school, food pantry, rental or community use of the building, since each changes the liability picture.

If your church does not have a written youth protection policy, that is the first thing to fix. It is the difference between being quotable and not, and we can point you to templates that carriers accept.

How much does church insurance cost in Nebraska and Iowa?

Church premiums vary too widely for a single number to be useful, because the drivers are the replacement cost of the buildings, roof age and construction, the size of the congregation and staff, whether there is a daycare or school, and the liability limits selected. A small rural congregation in Harrison County with one building and a part-time pastor is a very different risk from a 1,200-member church in Sarpy County with a preschool and a fleet of vans.

What we can tell you is that the spread between carriers on the same church is wide right now, often 30% or more, and that the churches paying the most are usually the ones that have stayed with one carrier through the hard market without being re-shopped. A review takes about an hour of a trustee's time and a copy of the current policy.

Who at Smith Davis handles church insurance?

Church accounts are handled by our commercial lines department, which is led by Pam Kreitzinger, who has more than 39 years in the business. Gina Andersen, our Commercial Lines Account Manager, services church accounts day to day, and Bob Sullivan, Director of Sales and Growth, leads new church quotes from our Papillion office. The agency itself is a member of ISU Steadfast, a national network of independent agencies, which gives a three-office agency the carrier access and claims leverage of a much larger firm.

Smith Davis has insured churches, schools and nonprofits in Southwest Iowa and Eastern Nebraska since 1931. We know what a hail season does to a Council Bluffs roof and what a Nebraska workers' compensation audit looks like for a church with a daycare, because we have been through both with our clients.

Frequently asked questions about church insurance

Does a small church with no paid staff need insurance?
Yes. Property and general liability are the minimum for any congregation that owns or rents a building and holds services, and abuse coverage applies the moment children are present. Workers' compensation is the one coverage a church with no employees can skip.

Are volunteers covered if they are hurt serving the church?
Generally not under workers' compensation in Nebraska or Iowa, according to Church Law & Tax. A volunteer accident policy, which is inexpensive, pays medical bills for volunteers injured while serving, and the church's general liability responds if the volunteer sues.

Is the pastor's home covered under the church policy?
A church-owned parsonage is covered as a church building, but the pastor's personal belongings and personal liability are not. The pastor needs a renters or homeowners policy of their own, which we can write alongside the church program.

Does the church need coverage for a mission trip?
Domestic general liability policies typically stop at the border. Foreign travel and missionary coverage adds medical, evacuation and liability protection for the group while overseas, and it is written per trip or annually.

What about renting the fellowship hall to outside groups?
Rental use is a liability exposure the carrier needs to know about. We recommend a simple facility use agreement and, for larger events, a certificate of insurance from the renter naming the church as additional insured.

How do we file a claim?
Report the claim to your carrier 24/7 using the number on your policy, then call us at (712) 322-1600 or (402) 331-7526 during office hours so we can follow the claim and step in if it stalls.

About the Author

Jeff Brehmer, CIC, CPIA, is President and Owner of Smith Davis Insurance, an independent insurance agency serving Southwest Iowa and Eastern Nebraska since 1931 from offices in Council Bluffs, Papillion and Logan. He can be reached at (712) 322-1600 or service@smithdavisins.com.

Last Updated: October 2026

Sources

• Church insurance market conditions, carrier nonrenewals and rating actions (2024): Insurance Journal / Religion News Service
• Most common and most expensive church property claims: Glatfelter Religious Practice
• Workers' compensation for church staff and volunteers: Church Law & Tax