Historic home insurance: not your usual policy

By: Shannon Lee , Contributing Writer
In: Old Houses, Historic Preservation

When I bought my first historic home several years ago, I was surprised to hear that a typical home insurance policy would not cover the replacements and repairs that might be necessary if the worst were to ever befall my new treasure. I got a quick course in the difference, and gladly paid the extra cash for historic home insurance. It just made sense, and there are several reasons why.

Historic homes are often divided into two categories: those built before 1945 and those built before 1900. Those that were built before 1945 might have some unique features that could be expensive to replace with period materials. Those built before 1900 are almost certain to have a great deal of unique features, one-of-a-kind architecture and materials that can be very difficult to replace or restore. Those who have a home built before 1945 might consider a typical homeowner policy with certain additional coverages, but those whose homes were built before 1900 might want to go with a historic home policy that includes restoration coverage.

A lovely historic home. Image credit CarolinaHistoricHomes.com

In most cases, the insurance company will want to send restoration experts and appraisers into your home before the policy is written. This helps ensure that they are aware of all the little details that can make the difference between your home’s true value and basic replacement value. They will also attach values to things in the house, such as antiques or art.

You might find that purchasing a fixer-upper means a typical homeowners policy is enough; but after you have done a few years of restoration and renovation, that policy might no longer apply. That’s why it pays to do an annual check of your insurance needs to determine whether you should switch to a different type of coverage that will take into account the work you have done on the home in recent years.

Don’t be surprised if you have to shop around for the right coverage. In some cases, insurance companies will refuse to cover a property if it appears the loss of it would mean a hefty payout. Look for companies that have a good track record of covering historic structures, such as Fireman’s Fund or Chubb Group. If you have trouble finding an insurance company that will cover your property, turn to the National Trust for Historic Preservation. They have special insurance programs for owners of historic properties, and one of them could help you insure your home.

Keep in mind that you will probably pay more for historic coverage. According to Insure.com, industry professionals warn to expect a premium that is about 20 percent higher than standard policies. However, the replacement value of historic features could make this special insurance a very wise investment.

One final point: no matter how old your home is, some modern safety measures should be taken, and won’t detract from the value of your home. Smoke detectors, sprinkler systems and the like can be installed in your home in a way that doesn’t compromise the historical integrity, and these measures can save a nice chunk of change on your home insurance policy.