Few people pay much attention to their contents and insured value of those contents. But as equally important as determining the replacement cost of the building, is the insured value of your contents. In the event of a fire or a catastrophic loss, the importance of how much that coverage is will suddenly loom large and you’ll be glad you spent a little extra time understanding and evaluating your contents coverage. By the way, contents are most referred to in the insurance world as “personal property” but for the purpose of this article, let’s just call them “contents”.
Understanding Contents
Offhand, that might sound a bit remedial, but questions arise on it regularly so let’s spend just a few minutes understanding what contents really are.
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Short Answer: Contents are those items you can pick up and move,
That means that items that are permanently attached to the building are considered a part of the building insured value and are not considered contents. For example, speakers, TV screens, and in some cases church sound/video boards are typical contents items that are redefined to be part of the building if they permanently attached to a wall or ceiling. The key word there is permanently attached. If a bracket is permanently attached to a wall but the TV just sits on the bracket and can be easily removed, the TV is still considered a content item.
Other common items include:
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Pews: If bolted down, they are considered part of the building.
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Chairs: If moveable, they are a content item.
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Pianos: This could vary, but generally speaking, a piano is a content item because it can be moved.
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Organs: Same as the piano, it it’s moveable, it’s a content item.
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Pipe Organs: These will be considered part of the building because they are a permanent structure. However, because of their uniqueness and typically higher value, you have the option of increasing the building value by the replacement value of the pipe organ or if you prefer, you can schedule it specifically on the policy.
Valuing Contents
If a fire or other catastrophic event were to destroy your Sanctuary, would you have enough insurance to replace everything? Of course no one can accurately answer that question without a complete inventory. Truth is, few people maintain a contents inventory but completing one could be one of the smartest things you could ever do. Having an up-to-date inventory would for one, ensure you have enough insurance to replace your building’s contents and two, will allow you to settle your claim more quickly.
Clearly completing an inventory is no small feat. We would recommend dividing the work among volunteers or staff who work in specific areas of a building, so that one person doesn’t attempt to tackle the project alone, which almost always results in being overwhelmed and not completed. Of course, if the process is too daunting, there are companies you can hire that will do an inventory for you and backup the results.
Without a completed inventory, we typically suggest an 18% building to contents ratio for most main sanctuary or education buildings and a 10% building to contents ratio for a gym or similar building simply because they typically contain fewer content items. Again, these are only guidelines and cannot be guaranteed to be as accurate as an updated inventory.
Personal Property of Others
In many churches with a praise band or orchestra, it’s common for an individual to leave or store their personal instrument at the church, sometimes only overnight but sometimes from week to week. Or your pastor(s) may keep their personal library (books, Bibles, etc.) at their church office. This is where you need to know your policy coverage or consult with your insurance agent for coverage related to this. It’s almost always referred to as “Personal Property of Others” and is most often included in the specialty coverage extensions of a policy. But coverage limits and deductibles can vary and some may pay on an excess basis (after any other applicable personal insurance), so just be sure you understand your specific coverage in this area. In some cases, you may be able to purchase additional protection.
What About Specialty Items, Collectables, Antiques, Etc.?
Anytime that you own an item of rarity, one that cannot be replaced and has a unique value, just as you would on your personal homeowner’s policy, you may need to consider “scheduling” such items on a coverage called Inland Marine (don’t worry about the name, just another old archaic insurance terms that never got updated from the 1700’s). But here you can schedule a specific value plus it typically has its own deductible.
Have questions on what to do about your contents or even about starting an inventory, it’s a good idea to call your agent for assistance.
