Imagine the river view from a historic Greek Revival home in Galena, Ill. Think of the time-stopping character of a Dutch Colonial in Pleasant Ridge, Mich. Or consider living in a Queen Anne in Georgetown, Texas, along the Chisholm Trail and close to Austin’s culture scene.
Owning an old home means restoration and customization. It means elbow grease and incredible curb appeal. It can also mean challenges when it comes to home insurance.
Owning an old home is like owning and old car. It’ll turn heads because it’s rare, but it’s tough to find replacement parts … because it’s rare. The cost to replace exterior moldings in a modern home is not the same as it would be on a Gothic Revival.
Flooring, windows and other structures unique to a style of home might be harder to find, too. Many insurance companies use computer programs to determine replacement costs. It’s not that simple when building materials and furnishings are rare and expensive.
And then there are historic designations to consider …
Getting historic designation
Your city might have a historical society that preserves the historic integrity of homes, and holds homeowners to a restoration standard. Such standards can cover everything from paint color to exterior fixtures.
Designation isn’t limited to old homes. New structures that have been sites of historic events also qualify.
Local preservation boards hold homeowners to a standard of consistency for accurate historical preservation. They often won’t allow modern exterior additions. Sun rooms or other structures that weren’t common for the home’s era aren’t often allowed.
Benefits of historic designation
There are several reasons a historic designation could benefit a home owner.
- What if more than one home in a neighborhood gains designation? That can protect your community against development that would degrade the area’s historic significance.
- Designation will protect your restorative work if you sell the home.
- It can upgrade property value and draw a more diverse market than newer properties.
Insuring the historic home
Some insurance providers that specialize in historic home insurance coverage estimate a home built before 1945 could cost at least 20% more to rebuild than a newer home.
Standard home insurance often can be enough for houses built post-1945, especially if the roof, plumbing, and electrical and other systems have been updated. For homes built between 1900 and 1945, you should consider additional coverage to manage specific unique features. An antique chandelier or leaded windows might justify such coverage. Historic preservation groups might stipulate you must replace 18th-century windows with authentic material. You might need additional coverage for windows, then.
Pre-1900 homes are best covered with historic home insurance. It’s about 20% more than standard coverage. It can take into account building materials that are more difficult to replace because of their age and rarity.
The bottom line
Insurance coverage is enough only if it covers the cost of total restoration if fire or other peril destroys it. This goes for homes of any age. Consider the following issues for historic homes:
- Look for replacement-in-kind coverage. Consider this coverage for anything hand-crafted, period-placed, or custom-made. The insurance company’s restoration appraisers will likely tour your home before writing a policy.
- Review your policy every year. This goes for all home owners, but especially for those who bought a home to restore. What began as a fix-up job can become designated as a historic home in a year.
- Don’t skimp. You can choose a higher deductible to lower your premium, as you can with typical home-owners insurance. Use caution, though. Be sure you can fill the gap when it comes to actual cost of replacement up to the deductible amount with assets on hand.