State Farm Florida recently announced it will exit the church market, a move that leaves hundreds of churches throughout the state seeking coverage, some for the first time in years.
State Farm spokesperson Michael Grimes said the decision to discontinue the church line of business is part of strategy to concentrate on its half-a-million policy homeowners book of business.
“To remain in Florida and serve as many homeowners as possible, we’ve had to gradually reduce our exposure in the state,” said Grimes.
Grimes said even before the current decision to leave the market, the insurer’s marketshare when it came to churches had been dwindling over the past several years. State Farm, which provided churches with liability and property coverage, would not say how many churches are affected, but some agents estimated it could be up to 500 in north Florida alone.
Matt Carlucci, with the Jacksonville, Florida-based Brightway Insurance Agency, said churches pose a number of special risks, especially those that operate day care centers and schools.
To obtain so-called “abuse and molestation” coverage, churches must show they perform background checks on employees and volunteers. Additionally, insurers may require that the schools and day care centers have in place rules such as not allowing males employees to be alone with a child and maintaining a certain ratio of teachers to students.
“To get coverage, the churches are going to have to prove they have those procedures in place,” said Carlucci.
Some churches may also have to obtain a separate policy rider to cover such items as religious icons and stained glass windows.
Churches are also facing the prospect of having to pay more out-of-pocket when it comes to wind coverage. State Farm Florida had only one deductible when it came to property damage, whereas most insurers have a separate deductible for wind damage.
“They are looking at a two percent, maybe five percent deductible on wind if they are lucky,” said Carlucci. “It the church is valued at $4 million that is a lot of money.”
The churches being non-renewed by State Farm Florida should be able to secure private coverage. There are several private insurers including Church Mutual Insurance Co. and Guide One Insurance Co. that insurer churches.
In 2009, State Farm of Florida sought to exit the Florida market entirely, before reaching a consent agreement with regulators. State Farm of Florida is separate from State Farm Mutual Automobile Insurance Co., which provides auto coverage to drivers throughout the state.
In addition to dropping the church coverage, State Farm Florida has also non-renewed some 10,000 homeowners policies and also dropped coverages for apartments and contractors. Earlier this year, State Farm Florida was granted a statewide average 18.8 percent increase in homeowners rates and 8.2 percent increase in its business program lines. – Insurance Journal
Officials are planning to ask the Supreme Court to throw out long-standing legal precedent that protects religious organizations from governmental regulations and intrusions.
Lawyers will present their oral arguments to the Supreme Court on Wednesday in “Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission.“ Religion News Service has dubbed this case ”one of the most important church-state cases in years,” thus this move by the Justice Department will surely be highly debated.
The case surrounds Cheryl Perich, who taught both religion and a secular subject at the Hoasanna-Tabor school in Michigan until 2004. It was during that year that she was diagnosed with a sleep disorder, which required that she take a few months off of work. The Lutheran congregation hired another teacher to serve as her replacement and they asked Perich to resign.
At this point, a doctor had given her permission to return to work. But considering the woman‘s illness and the church’s attempt to replace her, she ended up threatening to launch a lawsuit and the congregation subsequently voted to let her go. After she was replaced, Perich did inevitably sue the school under the Americans with Disabilities Act.
The church‘s argument was that her job wasn’t covered under employment law, seeing as the position was at a religious institution, which is shielded from traditional federal employment regulations. Although she lost the first court battle in 2004, the 6th U.S. Circuit Court of Appeals (Cincinnati) subsequently ruled in her favor. Religion News Service sets up the questions surrounding the legal debate:
The question before the justices concerns the “ministerial exception,” a 40-year-old legal doctrine that protects churches and other religious institutions from government interference in their employment decisions.
Few would dispute that a religious congregation should be unfettered when it chooses to hire or fire clergy. But what about other church employees?
The government appears poised to side with Perich. In a legal brief, which was already submitted to the Supreme Court, the Obama administration seeks an elimination of the ministerial exemption. The document, which was written by Solicitor General Donald Verilli and Thomas Perez (head of the civil rights division), says, ”The Establishment Clause … provides no support for a categorical ministerial exception that would bar adjudication of this case.”
Interestingly, the administration argues that even if the court does, indeed, reaffirm the exception, it should not apply to teachers in religious schools. “Plaintiffs in that category should be able to proceed with their claims, subject to careful trial management by the district courts and appropriate sensitivity to [church-state] entanglement concerns,” the brief reads. – The Blaze