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Financial Planning

Insurance

Renter’s Insurance
Every clergyperson that lives in a parsonage should have his or her own renter’s insurance. This type of insurance has two components: property coverage and liability coverage. Though the church may indicate that they have insurance that covers your contents, there are some good reasons to have your own policy.

An example of the advantages of your own policy regarding property coverage is that if you have personal property that is off the premises (such as a computer at college) it can be covered under this policy.

Regarding liability coverage, should someone have an accident at the parsonage and it is deemed to be partially your fault (failure to shovel the sidewalk or remove a hazard) your own personal resources are protected.

Auto Insurance
The need for this is almost self-explanatory; however, given the large volume of use of an automobile by clergy, the limits of liability on this policy need to be reasonably high.

Also, most church policies have coverage for “non-owned auto.” This means if you are using your car on church business it protects the church from liability as well. Yet, it presumes that your auto policy has certain basic liability limits. You should check with the church insurance to discover what coverage you need to carry so that you meet the church policy requirements.

Disability Insurance
From a financial perspective, you are far more at risk to be disabled than to die. This is especially true since most pastors are living in parsonages. Should you become disabled, you have a need to not only replace your current cash income, but also what you are receiving in kind in the form of housing.

Under the MPP plan of the General Board of Pensions you have some disability coverage for long-term disabilities. Also, if you participate in Social Security you may have coverage if you have met the minimum pay-in requirements. However, neither of these plans provides coverage for short-term disabilities (lasting less than one year).

Disability insurance cost is based on the amount of the payout you will get if disabled, when the payments will start, and how long they will last.

Umbrella Insurance
As the name implies, this policy picks up where your other policies (renters, auto, and liability) leave off and provides extended coverage. These policies are usually bought in million-dollar multiples. This coverage is essential due to the potential that clergy have to be involved in traffic accidents as well as counseling situations.