A Guide to Historic Home Insurance by Mark Wilhelm of Daigle & Travers Insurance
Most people don’t purchase an antique home without knowing you’re making a true investment of both time and financial resources. Historic homes are more than just a house, but a hobby, a passion, a history lesson, a family member. My intrigue with historic homes began in 2011 when I purchased a 1784 converted farm house in Fairfield. The house was the crown jewel of the neighborhood with a wrap-around front porch, large stone fireplace, wide-plank floors, and “cozy” 8 foot ceilings throughout the second floor. Owning this home quickly spring-boarded me into both a history lesson of the home as well as a lesson in what it takes to be a good steward of an antique home.
Every home and each homeowner are different, but older homes can bring an added feeling of responsibility to the property owner. Responsibility to both the home, as well as to the previous owners, to do your part in maintaining the historic integrity of the property. Construction methods and building materials are constantly changing and it requires a commitment of both time and money to maintain the period correct finish of your antique home.
One component of this commitment is being diligent in obtaining proper Homeowners Insurance for your antique home. Home insurance policies are NOT all the same and when it comes to the unique characteristics and hard to source materials of an older home it’s important to be sure you’re purchasing the coverage you need. Insurance companies such as AIG Private Client Group, Berkley One, Chubb, Cincinnati Insurance, Pure Insurance, and Vault, tailor their policy contracts to homes with unique features and difficult to replicate components. Antique and historic homes often include things such as hand-hewn beams, wide plank floors, and ceramic or wrought iron fixtures, and, in a claim scenario, the best insurance policies will allow you to replace these items with appropriate period correct materials.
What makes a home Historic or an Antique?
When insuring antique or historic homes, the year your home was built is very significant. Homes built before 1945 are generally considered antique by insurers. Construction methods effectively modernized after 1945. So as far as Homeowners insurance goes, the year built is a very important factor.
Any antique home built prior to 1945, which also meets one of these three characteristics, would likely be considered a “Historic Home”:
- Homes with a connection to a historic event
• Homes with a connection to a person of historic significance
• Homes that utilized unique architecture or construction methods
Homes built prior to 1900 are more difficult to insure than newer homes. Average insurance companies have a threshold for the age of a home that they can accommodate. So not only will you find the insurance policies themselves to be more restrictive, the insurance itself may be hard to find. We work directly with some of the premier carriers in the industry such as AIG Private Client Group, Berkley One, Cincinnati Insurance, Chubb, PURE, and Vault Insurance. Carriers such as these design their policy contracts for unique, historic, and high value homes and the specialty insurance coverage they require.
What should I look for in a policy?
Most home owners assume when you buy a standard homeowners insurance policy, all your property will be replaced back to the way it was prior to their claimable loss. However, this is not the case when it comes to insuring an antique home with a standard (HO-3) policy.
If your antique home has wide-planked hard wood floors that get damaged, a standard policy would replace it with strip wood from the nearby lumberyard. If your field stone foundation is damaged the company may look to repair or replace it with a poured concrete foundation. This may not be what you want when it comes to your Antique or Historic home, especially if you aren’t aware of the limitations of your insurance policy. It’s important to be certain that the historic and unique features of your home are accounted for so they can be replaced with appropriate materials.
Antique homes require “Guaranteed Replacement Cost coverage”. A Guaranteed Replacement Cost policy will provide the necessary coverage to repair or replace your entire antique home when it is damaged in an insurance claim. When you insure your older home for its replacement cost, your insurer will compensate you for the cost of reconstructing or restoring your home to the exact way it was before it was destroyed up to, and even beyond, the policy limit.
Guaranteed Replacement Cost in Antique Home Insurance Coverage
“Guaranteed Replacement Cost” (GRC) is included automatically by the insurers best suited to insure an antique home. It can be added by endorsement by some home insurance carriers, whereas many carriers don’t offer it at all.
By purchasing a policy with this important coverage, you essentially gain unlimited dwelling coverage. As long as you accept the insurer’s initial inspection results, inform the insurer of any change to the home that would impact the estimated replacement cost, and accept the annual inflationary increases each year, your insurer will pay ANY amount to replace your home. This is crucial for antique homes because the truth is when an antique home is being repaired, the cost of repairs almost always exceeds the initial repair estimates. Without Guaranteed Replacement Cost, you could fall short of the necessary funds to rebuild your home.
When Guaranteed Replacement (GRC) is not available, extended replacement coverage is the next best option. This policy endorsement will cover an additional 20% – 50% of the insured value of the home. Knowing that it could cost you much more to restore your home, this option provides the peace of mind that you will be covered when going through the remodeling stages following a loss.
Building Code Law & Ordinance Coverage
Building Code coverage is needed when an antique building has been damaged. This coverage protects you when you have to update your home to the latest building codes following a loss. When rebuilding, you may have to rewire your house, raise the home to current foundation requirements, or move the home on the property to meet the current set back requirements. Insurance policies will vary greatly in how they cover the extra costs you may incur.
Most standard homeowner’s policies provide a small amount of building code coverage, however the older the home the more likely the house is out of compliance with today’s building codes.
How can I lower my insurance costs on my Antique home?
- Make updates to your older home (some insurers may require you to make these updates before you purchase insurance)
- Bring the electrical wiring up to current building code
- Update the plumbing system
- Install a new roof
- Update your appliances
- Add safety devices (smoke detectors, alarms, fire sprinklers, permanent electric generators, etc.)
- Increasing your policy deductible can lower your premium.
Other Important Information about Antique or Historic Homes
- Talk to an agent regarding whether your home qualifies for Historic Home Insurance.
- Bring in experts to determine if you should update aspects of the home.
- Know what your priorities are if your home is damaged.
- Be knowledgeable when purchasing an older home that special houses require special Homeowners insurance
- Contact a local insurance agent to help you determine the best coverage you need.
Get the Historic or Antique Insurance Coverage that your Home Needs
When insuring your antique home, you need the right coverage to preserve the history and character of that home. When looking over your homeowner’s insurance policy, make sure you are fully covered in case of damage. If you feel that you are lacking coverage, it is time for a new agent.
Here at Daigle & Travers, we will provide you with the assistance you need when you are purchasing your homeowners insurance for your home. When partnering with us, we will give you all the necessary information and options you need to make the best choice of insurance company and policy.
Give me a call today!