How a Deductible Affects Premium
A periodic review of your insurance policy is a good way to make sure your ministry is protected for its most current needs, but it also may offer the opportunity to find some significant savings. For property and liability insurance, you can lower your premium payment by choosing a higher property deductible. This is because a ministry with a higher deductible takes on a little more of the financial risk from a claim event. This approach can save money over time, enabling you to have additional funds to directly impact your mission.
Let’s say a ministry currently has a $1,000 deductible and an annual premium of $8,500. If it raised its deductible to $2,500, the annual premium would be reduced to $8,100. Over time, the premium savings can add up, even if the ministry files a claim. Not only does this free up ministry resources now, but it can save money long term.
The chart below demonstrates how this premium savings can add up by comparing three example property deductibles and their related premium payments. The last column shows a ministry’s savings even if it had to incur the cost of the applicable deductible. Remember, the difference between a $1,000 deductible and a $2,500 deductible is only $1,500, so even if the ministry had one claim in five years, it could still save money.
For additional savings, Brotherhood Mutual includes a loss free deductible incentive with its MinistryFirst® policies. The longer you go without filing a property claim for which a payment is made, the lower your deductible goes, leading to an additional savings of up to $2,500. For example, after six years with no property claims where the company made a payment, a ministry with a $2,500 deductible would pay no deductible if it were to file a claim.
You can maximize your savings by implementing risk management practices to help prevent losses altogether. Brotherhood Mutual offers a free online Safety Library with hundreds of risk management articles, sample checklists, forms, and more at: brotherhoodmutual.com/safety.