Construction costs have risen substantially across Montana over the past several years, and property insurance values haven’t always kept pace, which means a growing number of churches may be underinsured without knowing it. This isn’t a hypothetical concern — it’s one of the most common issues that surfaces when an older policy finally gets a fresh look.

The core problem is straightforward: if your church’s building is insured for what it would have cost to rebuild five or ten years ago, and that number hasn’t been updated, you may be significantly underinsured relative to today’s actual construction costs. Most commercial property policies include a coinsurance clause, which can reduce claim payouts proportionally if the building is insured below a required percentage of its true replacement cost — meaning underinsurance doesn’t just risk a coverage gap on a total loss, it can reduce payment on a partial loss too.

Many churches also haven’t factored in the cost of code-compliant rebuilding, which can be meaningfully higher than simply replacing what existed before, especially for older buildings that would need to meet current building codes if reconstructed today. An “ordinance or law” coverage endorsement addresses this gap specifically, and it’s worth asking whether your policy includes it.

The fix here doesn’t require a full appraisal every year, but it does require periodic attention — ideally checking in with your agent every renewal cycle about whether your insured values still reflect realistic rebuilding costs, and considering a professional appraisal every several years for larger or older properties where the numbers matter most. It’s a much easier conversation to have proactively than in the aftermath of a fire or major storm.

Action Items

• Compare your current insured value against today’s local construction costs, not the number from five or ten years ago.
• Schedule a professional appraisal for larger or older properties if it’s been several years since the last one.

This post is for general informational purposes only and isn’t legal or insurance advice — every property and policy is different, so please talk with a licensed insurance professional about whether your coverage reflects current replacement costs.