Sunday, June 17, 2012

Insuring against catastrophe

I have been doing some thinking lately about our current plight in the Diocese of Christchurch about buildings. Some of the thinking has been around submitting a motion for our next Synod in September (cited below, with explanation). Some has been around the particular circumstances of the damaged building at St Aidan's Bryndwr where I am interim Priest in Charge. Some has been in relation to other parishes working out what they are going to do about their situations. In this post I am raising the question, Do we need to insure against earthquakes?

The question is worth raising because (a) the premiums for insurance this year are huge (a 530% increase on last year's premiums), (b) currently the excess on the collective insurance we have is $15 million (which means that in a minor earthquake there might be no payout despite the huge pay in of premiums, and (c) it appears that other churches are not required to have earthquake insurance, a notable example being the Anglican cathedral of Wellington which I am told has not had earthquake insurance for many years. It seems to me that the insurance the Anglican Insurance Board has procured for us is insurance for catastrophic earthquakes, not for (comparatively) minor earthquakes. In terms of our earthquake experiences in Canterbury, it is insurance for 22 February 2011 and not 4 September 2010. But it is the best they can do in a market somewhat loathe to provide insurance!

Of course it sounds simple and neat to not have insurance for a catastrophic earthquake, but we do need some provision for paying for the demolition of buildings, and there are considerations about public liability and such things which I do not understand well.

What are your views?

My submission re our Synod:
"That this Synod,

Notes changes to our Title F Canon 3 Clause 14 (on insurance of church buildings) at our recent General Synod (July, 2012), the effect of these changes being to clarify that church trustees are not required to ensure insurance for earthquake damage as part of their prudential duties,*

Notes other dioceses and other denominations in Aotearoa New Zealand are permitting buildings not to be insured for earthquake damage,**

Notes that our own Financial Regulations (2007) Section 13 Clause 13.2 states, “All buildings and other improvements will have material damage insurance cover for replacement value unless specifically agreed otherwise with the Church Property Trustees”,

Notes that current premiums for earthquake insurance are potentially either unaffordable by some parishes or inhibiting of continuation of current provision for stipended ministry,

And therefore,

Agrees to the principle that parish buildings in the Diocese of Christchurch for the time being need not be insured for earthquake risks; and

Recommends to the Church Property Trustees the principle that parish buildings in the Diocese of Christchurch for the time being need not be insured for earthquake risks, and

Asks the Diocesan Manager to convey this resolution to the Church Property Trustees on the close of this session of Synod.

Mover: Peter Carrell

Explanation: It is clear to the mover, both from conversations with clerical and lay synod members, and from participation in a seminar at St Timothy’s Burnside on Saturday 26 May, 2012 led by the Anglican Insurance Board, that there is (a) considerable concern about the affordability of insurance premiums re earthquake cover, (b) questioning whether earthquake cover is necessary for the time-being, with such questions being more urgently raised when it is realised that the Diocese of Wellington, at least in relation to Wellington city, is not requiring insurance for earthquake cover.

It is also the understanding of the mover that some buildings in the Diocese of Nelson are not being insured for earthquake cover; as well, some Presbyterian buildings are likewise not being insured, a notable and historic example being Knox Presbyterian Church in Dunedin.

Whether this motion is the best form of words to address this matter is open to question but the mover feels strongly that the parishes of the Diocese of Christchurch should not be bound to pay what they do not need to pay, and thus there should be a debate in Synod on this matter.

*A proposal is going to General Synod for such change. Obviously we need to receive the actual change (if any) which General Synod agrees to. The proposal to General Synod is in a PDF attached in the email this document is being sent by.

**To the mover’s knowledge this includes the Diocese of Wellington and the Diocese of Nelson, as well as the Presbyterian Church of New Zealand." Cited from the submission I made on 1 June 2012.


Father Ron Smith said...

I applaud, Peter, your proactive stance on this important matter of Church Insurance. Where individual parishes are operating in almost financial deficit conditions, the payment of an exorbitant insurance tariff would seem to be a 'step too far' - especially in the current climate of world-recession.

How the Church manages this problem is going to affect us all - with the prospect of continuing mission dependent on some management capability that seems beyond most parish amenities. At a time when we seem to be absorbed with apparent problems of 'morality', we need to still consider the nuts and bolts of the structures.

I am aware of the old adage that: "There are more things wrought by prayer than this world dreams of", but common sense is also needed.

Andrew Reid said...

Hi Peter,
Not sure things work in NZ, but in Australia public liability is usually a separate beast to earthquake, fire or other kinds of insurance, and there is govt legislation mandating it for buildings.
I don't envy the decisions you have to make, which are no doubt complex and stressful. A key question may be "What do we have instead of earthquake insurance?" A self-managed fund, some kind of co-operative with other churches and charities, or something else.
I certainly appreciate your emphasis on maitaining ministry staff ahead of paying for the buildings.

Peter Carrell said...

Thanks Ron and Andrew.

Yes, an ideal scenario would be our own managed "self-insurance".

Father Ron Smith said...

'Hi Ron,
I believe we will be accountable before God for what we say and do, and especially when we are teachers of the faith.

Do you not believe in that?" - P.C.

I believe that we don't have to wait till the death of the body to know our accountability before God. That to me is a very dichotomous view of our human pilgrimage. - The words of Jesus: "Insomuch as you do these things (Love, Mercy) towards these my little ones, you do them unto Me" - "for of such is the Kingdom of Heaven". Our task is not to judge, but to enable redemption.

I once heard a pretty good summary of challenge to the Hell-fire ethos

'It's not 'pie in the sky when you die', but rather, 'steak on the plate while you wait'. If we had to wait for correction of our false ideas about God's purpose in our lives until we died, what would be the purpose of our continuation of life here? To me, the ultimate punishment of life after death might be annihilation - to not meet God face to face and experience God's loving mercy and forgiveness.
I am not a hell-fire fanatic.
If we don't amend our wicked ways while we are still here, why should we expect to be able to do that in the hereafter? Here; 'we live and breather and have our human being'. Who knows what we will be like in the fullness of God's Loving Presence? Except that people of Faith believe in God's great Love, mercy and forgiveness - which we, as the human followers of the Incarnate Word, need to exercise now. "Now is the acceptable time.."