Insurance cover for heritage buildings and sites can be complicated and challenging, due to the many unique features and considerations in place, according to brokerage Crombie Lockwood.
The firm’s group broking manager, Steve Walsham, said in a blog post that many historic church buildings have been built to specifications dating back to the late 1800s or early 1900s. In case they needed to be rebuilt today after an event such as an earthquake or fire, church organisations should consider what would actually be practical to rebuild.
With church attendance declining over the past generation, church leadership may think of building back smaller to fit the needs of today’s churchgoers. However, issues may emerge with insuring the building to a value of a more suitable replacement.
Many old churches contain works of art such as artisanal stained-glass windows and hard-to-source materials such as native timbers or Italian marble. Further complicating the valuation process is the cost of the time and skill of expert craftspeople to replace them.
While many church organisations are asset-rich, they often lack liquidity, Walsham said. With a good number of churches located in high-risk seismic zones, insurance becomes prohibitive for many church organisations.
Another major consideration is the added layer of having to deal with local government consents and Heritage New Zealand consultation before repair work can begin. According to Walsham, these may take years, and the value of insurance cover may no longer reflect real-world costs once repairs get the green light.
“Then, if you think of an example like an historic hotel or retail establishment, this could also present a need for extended loss of revenue/profit insurance if the building and the business that operates from it have to be closed for a significant amount of time,” Walsham said.
“The subject of insuring historic buildings is an emotive and complex one for all concerned. But through dedicated expertise, solutions certainly can be found.”
