By Laura J. Brown
If fire were to strike your sanctuary tomorrow, could you tell an insurance adjuster exactly which items were lost? Take this test:
Step 1. Visualize your church sanctuary.
Step 2. Estimate how much it would cost to replace everything inside of it. Write down that figure.
Step 3. Write down every item housed in the sanctuary from memory.
Step 4. Write down the make, model and description of each item, where and when you bought it, and roughly how much it cost — without any visual reminders.
Step 5. Walk into the sanctuary and compare your list with reality.
Imagine repeating this exercise for every room in every building that your ministry owns, sifting through waterlogged, soot-stained items for clues. Wouldn’t it be easier to do a personal property inventory now, while you can see everything? Wouldn’t it be comforting to know that you have enough insurance to replace everything in your church if you needed to?
Contents often undervalued
When pastors tally the value of their contents after a fire, explosion, or other disaster, they’re often dismayed to learn their property was worth far more than they had guessed. “When you pick things up over time your inventory swells and what you think you have, you don’t,” says Scott Figgins, vice president of claims at Brotherhood Mutual Insurance Company.
Churches now rely on high-quality audio and video equipment, which can cost thousands to replace. When a single wireless microphone can cost $500, relatively small purchases of technical equipment can quickly add up.
When you purchase contents insurance, your agent will ask how much coverage you need. If you don’t know, the insurance company will encourage you to estimate your contents’ value as a percentage of your building’s replacement cost. For example, if your building is worth $5 million, you might estimate your contents’ worth at 10 percent of $5 million, or $500,000. But your contents could be worth far more than that. You won’t know unless you have an accurate inventory.
Performing a personal property inventory can be as simple as walking through your church building with a notepad or video camera and recording everything you see. Yet few churches take the time to complete one until they suffer a loss.
Then, the process becomes much more difficult. You have the emotional and mental burden of rebuilding your church, in addition to several logistical challenges. These include:
- Interacting with police and fire officials
Determining where to meet
Establishing phone service
Continuing outreach ministries
Finding reputable contractors and soliciting construction estimates
Performing day-to-day ministry
Your insurance company will pay for your damaged items, but it won’t cut a check until you provide a complete list of everything that was affected. So, now you’re racing against the clock too. In addition, you may have lost some rare or historical items that can’t be valued easily after a loss. The only way to be reimbursed for what they were really worth is to have these items photographed and appraised ahead of time.
Choose a tool for inventory
There are several tools you can use to conduct an inventory. The most important consideration is to choose a method that will be easy for you to update annually.
Paper: Your insurance company can give you a room-by-room guide that walks you through the process, or you can create your own list on a legal pad. This is the lowest-tech and least expensive option, but it can be time-consuming to update and maintain.
Computer: You can buy inventory maintenance software to conduct your initial survey and track subsequent purchases, but most churches don’t need this level of sophistication. Nearly every office computer contains spreadsheet software like Microsoft Excel software, which works well for creating property inventories. Using a computer program offers several benefits over paper.
- It does the math
- It can sort the information various ways
- It’s easy to update
Still camera: Pictures capture detail that you might omit from a paper or spreadsheet inventory. Color, size, shape, model numbers, quality and approximate age are some of the features a camera will collect, all with the snap of a shutter. With a digital camera you can burn the images to CDs and keep a copy off-site so you can easily retrieve your inventory. However, there are some drawbacks to relying solely on photos. It can be difficult to value an item just by looking at it in a picture. You could also easily forget to photograph important items that are tucked away in closets and cabinets.
Photographs can’t capture replacement costs, a key reason for conducting a written inventory.
Video camera: A video camera allows you to quickly capture an overall picture of a room, plus whatever items you wish to inventory. It has roughly the same advantages and drawbacks of a still camera, with an added caution: the operator must zoom in on each major item to be documented. A quick pan of each room is of little use after a fire.
Combination of written and visual: Ideally, you would create a written inventory (paper or spreadsheet) supported by pictures (still or video).
When completing a written inventory it’s important to go through your building and list all valuable items you find in each room. You should start with the big-ticket items, such as the sound equipment, video equipment and musical instruments in your sanctuary.
Make sure to document specialty items that would be hard to replace. Make note of unique communion sets, candleholders, crosses, or artworks that are not part of the building. Art objects with a value greater than the item’s actual cash value may need special fine arts coverage.
Don’t forget smaller items that add up when you purchase them in quantity such as:
Folding chairs and tables
Sunday school materials
Library materials (tapes, videos, books)
Describe each item (type, model number, or serial number), and note its quantity and include purchase information (where, when, and how much you paid). Also, determine the cost of replacing it with something new today by looking online, in stores or catalogs.
You should continue your inventory of items on a room-by-room basis. Remember to record contents from other facilities, such as a school or maintenance building. Include the personal property that members store at the church, like musical instruments or your pastor’s books. Some insurance policies will cover these items on an excess basis, after the members’ insurance has paid its limits.
Go through your building systematically, recording images of all valuable items you find in each room. Don’t forget to open closet doors and videotape the contents inside.
Zoom in on each item, concentrating on getting sharp and high-quality images. Close-up shots reveal more than those taken at a distance, particularly when you’re trying to identify and assess value.
Maintain accurate records
Keep receipts: Regardless of which method of inventory you choose, attach or store proof of purchases with it. These include invoices, cancelled checks, bills of sale, credit card receipts or gift records.
Create multiple copies: When your inventory is complete, create multiple copies and store at least one of them off-site, such as at your home or in a bank safe deposit box. Give a copy to your insurance agent too.
Update inventory annually: The key to having an accurate inventory is keeping it up to date. One option is to keep the inventory active and update it every time you buy a new piece of equipment. Another is to review your inventory annually, noting any new purchases since the last inventory was completed.
Creating a thorough property inventory will allow your church to be ready in the event of an emergency or accident. It’s a good idea to call your agent before starting your inventory. Your agent can give you tips pertaining to your situation, answer questions about your present coverage, and help you evaluate whether you need additional coverage.
Laura J. Brown is communications specialist with Brotherhood Mutual Insurance Company. [brotherhoodmutual.com]