Top Things to Consider When Choosing Homeowners Insurance for Your Historic Home or Property
Top Things to Consider When Choosing Homeowners Insurance for Your Historic Home or Property
Centriumsquare.xyz - As a mother and homeowner of a historic home, I'm always fascinated by the beautiful architecture and rich history of these properties. After months of searching, my family and I finally found a Victorian-style home that was over 100 years old. It had all of the features we had been looking for - a wrap-around porch, intricate woodwork, and a grand staircase. We knew it was the one and made an offer on the spot.
But as I began the process of purchasing our dream home, I realized that I needed to purchase homeowners insurance to protect our investment, to understand as owners of a historic home, we knew that our property was unique and valuable. From its intricate architectural details to its rich history, our home is more than just a place to live - it's a piece of living history.
That's why it's important to understand the potential risks and challenges that we may face as owners of a historic home. We needed specific coverage options that were available to us through homeowners insurance for historic homes. With this insurance, we knew that we would be able to protect our investment and ensure that our home would be preserved for future generations to appreciate and enjoy.
Basically owning a historic home is a special experience, as these architectural treasures often come with unique charm and character. However, insuring a historic home requires careful consideration to ensure adequate protection for its distinct features and potential risks. In this article, we will explore the top factors to consider when selecting homeowners insurance for your historic home, helping you make informed decisions to safeguard your valuable investment.
So What is Historic Home?
For your home or a designated historic site to be officially considered, our home must meet certain standards set by the National Park Service's National Register of Historic Places.
The National Park Service's National Register of Historic Places is a national program dedicated to preserving historic properties across the United States. Additionally, states and municipalities can designate homes or neighborhoods as historic.
When evaluating your property, the National Registry will consider three areas:
- Age: our home must be over 50 years old to be considered historic.
- Integrity: our home must look same or simillar to when it was built.
- Significance: our home should have some kind of cultural significance—this could mean that an important person lived there, that a historical figure was associated with the property, or that it represents architectural or engineering excellence from a particular time period.
One of the most important factor to consider when purchasing homeowners insurance for a historic home is the age of the home. Older homes may have outdated electrical and plumbing systems, some might rusty as well as other features that could be considered a liability. This can make them more expensive to insure. It's important to have a thorough inspection of the house before purchasing the right insurance to ensure that any potential issues are identified and addressed.
Another factor to consider is the replacement cost of the home. If our home is a one-of-a-kind historic property, it may be more difficult to find replacement materials or craftsmen skilled in repairing or restoring the home's unique features. This can increase the cost of repairs and, in turn, the cost of insurance. It's important to work with an insurance company that has experience insuring historic homes and understands the unique challenges that these properties may present.
It's also important to consider the location of our historic home. If the home is located in an area that is prone to natural disasters, such as earthquakes or floods, we may need to purchase additional coverage to protect against these events. Similarly, if the home is located in a high-crime area, we may need to purchase additional coverage to protect against theft and vandalism.
Homes that qualify as landmarks or historic buildings often receive perks such as tax breaks and low-interest loans. In turn, you as the homeowner are responsible for maintaining and protecting the integrity and heritage of the home.
6 Thing To Consider When Purchasing Homeowners Insurance for Historic Home
1. Preservation and Restoration Coverage
Historic homes often require specific preservation and restoration methods, which can be more expensive than regular maintenance for modern homes. When choosing homeowners insurance, look for coverage that accounts for the unique materials, craftsmanship, and architectural features of your historic property. Ensure that the policy includes provisions for specialized restoration techniques and materials, as well as coverage for the increased cost of rebuilding or repairing historical elements in the event of damage or loss.
2. Guaranteed Replacement Cost Coverage
Standard policies typically provide coverage up to a specified limit, which may not be sufficient for the cost of rebuilding or restoring a historic home. Consider selecting a policy that offers guaranteed replacement cost coverage, ensuring that your insurance will cover the full cost of rebuilding or repairing your home, regardless of the limits specified in the policy. This type of coverage provides added peace of mind, particularly for historic homes with unique architectural details and hard-to-find materials.
3. Appropriate Valuation
Accurately valuing a historic home can be challenging due to its historical significance and potential appreciation over time. Work with an experienced appraiser who specializes in historic properties to determine the appropriate value of your home for insurance purposes. This valuation should consider factors such as historical significance, architectural integrity, and the market value of comparable properties. By ensuring an accurate valuation, you can avoid overpaying for coverage or being underinsured in the event of a claim.
4. Specialized Coverage for Historic Artifacts
Historic homes often house valuable artifacts and antiques that require additional coverage beyond standard personal property coverage. Consider adding a rider or endorsement to your policy specifically for these valuable items. This specialized coverage should provide adequate protection for your historic artifacts, taking into account their unique value and potential appreciation over time. Documenting and appraising these items will help facilitate the claims process in case of damage or loss.
5. Preservation Society Requirements
If your historic home is part of a designated historic district or governed by a preservation society, it's essential to review any insurance requirements or guidelines they may have. Some preservation societies may have specific insurance requirements to ensure proper protection and maintenance of historic properties. Confirm that the policy you choose meets these requirements to ensure compliance and maintain the integrity of your home within the historic community.
6. Deductible and Premium Considerations
Evaluate the deductible and premium structures of various insurance policies. While a higher deductible can lower your premium, consider the potential financial burden in the event of a claim. Strike a balance between an affordable premium and a deductible that you can comfortably afford. Additionally, explore potential discounts offered by insurance companies for features such as security systems, fire-resistant materials, or membership in historic preservation organizations.
It's also a good idea to review our homeowners insurance policy regularly to ensure that it still meets our needs. As our home and our personal circumstances change, our insurance needs may also change. For example, if we make significant renovations to our home or acquire additional valuable items, we may need to adjust our coverage accordingly, here's how to file a claim insurance.
4 Tips For Insuring Your Historic Home
Here are some tips for purchasing home insurance for our historic home, according to the National Trust for Historic Preservation.
1. Using the services of National Trust Insurance Service
Consider finding specialty insurance for historic homeowners through the National Trust Insurance Services (NTIS), an organization that helps homeowners find insurance companies that specialize in covering the unique risks associated with older homes. NTIS works with different insurance companies and can connect you with the right moving company for your historic home needs.
2. Consider a high value homeowners insurance company
Some insurance companies specialize in covering high-value homes, including historic homes. Here are two high value insurance companies that you may want to consider if they are available in your area:
- Chubb: Chubb offers extended replacement cost policies at no additional cost, as well as personal property coverage for replacement cost.
- AIG: AIG offers guaranteed replacement cost policies, unlimited water backup coverage, and free home counseling services for homes built before 1945.
3. Consider the HO-8 policy
An HO-8 policy, also called modified coverage insurance, is a type of homeowners insurance designed for older homes or homes with a rebuild cost above their market value.
HO-8 policies are geared towards protecting older homes that do not meet homeowners insurance coverage standards. Unlike a standard home insurance policy, HO-8 policies do not require four-point inspections. And you may not have to update your home details — such as old pipes or wiring — to qualify for coverage.
What is the downside? HO-8 policies pay only the actual cash value of our home and property, which means that depreciation is factored into reimbursement of your claim after a covered loss.
4. Add an extended replacement or guaranteed replacement cost coverage for your home
Extended replacement cost coverage is an add-on coverage that increases your home coverage limits by an additional 25% to 50% if the cost of rebuilding your home is higher than your policy limit.
Guaranteed replacement coverage is similar to extended replacement cost, but it reimburses you for the full amount of rebuild costs -- regardless of price. This means that if your home is completely destroyed, the insurance company will pay the full amount it would cost to rebuild your home from the ground up.
When it comes to homeowners insurance for historic homes, it's important to work with an experienced insurance agent who has a thorough understanding of the unique needs of these properties. By carefully considering our coverage options and working with a trusted insurance company, we can protect our historic home and our investment for years to come.