Top Things to Consider When Choosing Homeowners Insurance for Your Historic Home or Property


Things to Consider When Choosing Homeowners Insurance for Your Historic Home

Top Things to Consider When Choosing Homeowners Insurance for Your Historic Home or Property

I’m always fascinated by the beautiful architecture and rich history of those beautifull properties, After months of searching, i finally found a beautiful Victorian-style home that was over 100 years old. It had all of the features i had been looking for - a wrap-around porch, intricate woodwork, and a grand staircase. They knew it was the one and they made an offer on the spot. As I began the process of purchasing their dream home, i realized that i need to purchase homeowners insurance to protect my investment.

You know as homeowners of a historic home, we know that our property is unique and valuable. From its intricate architectural details to its rich history, a historic home is more than just a place to live - it's a piece of living history. When it comes to protecting our home, it's important to understand the potential risks and challenges that we may face, as well as the specific coverage options that are available to us, so this is where homeowners insurance for historic homes comes in.

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 Older homes may have outdated electrical and plumbing systems, some might rusty as well as other features that could be considered a liability.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.

In addition to these factors, there are also a few other things that we should consider when purchasing homeowners insurance for ancient historic home:

  1. Coverage for historical artifacts and artifacts: If our home is a museum or contains rare or valuable historical artifacts, we may need to purchase additional coverage to protect these items.
  2. Coverage for renovations and repairs: If we are planning to renovate or restore our historic home, we may need to purchase additional coverage to protect against any unexpected expenses that may arise. It's important to work with a contractor who has experience working on historic homes and understands the importance of using authentic materials and techniques.
  3. Coverage for personal property: Be sure to purchase coverage for our personal property, such as furniture, appliances, and other household items. This will ensure that we are compensated for any loss or damage to these items.
  4. Coverage for liability: If we plan to open our home to the public for tours or other events, we may need to purchase liability coverage to protect against any accidents or injuries that may occur on our property.

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.

4 Important Tips For Insuring Our 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 InsuranceService

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.