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renovation home |
Insurance for Historic HomesGetting insurance for your old house can be a frustrating experience.One of the things that you have to remember is that standard homeowner's insurance is designed to replace the standard buildings being put up today. They rarely can cover the replacement cost of an historic home. Usually, you can insure your house only for the market value (i.e., what you could sell it for) instead of the actual cost of replacing your home if it is catastrphically lost. For example, the estimates to actually rebuild my house as it stands now, with the same workmanship, are several hundred thousand dollars -- the bricks are very hard to get and are expensive; all wood doors, windows and floors, plaster walls, etc. But my house would sell for maybe a third of the estimated replacement cost. I currently can only recoup the market value and would not be able to rebuild my house. This is not uncommon. And, in addition to not being able to rebuilt your unique old home, you will not be able to appreciate the value of all the hand-made and specialty work in the renovation, including hand made mouldings, new handmade doors, plaster work, or antique doorknobs. However, there are some insurance agencies that are beginning to realize the value of the unique and irreplaceable homes we renovate. Some of these policies are "replacement in kind", which means that if your hand-made 200 year old mahogany door is kicked in during a burglary, the insurance policy will pay to replace the door with a 200-year old hand-made mahogany door (assuming you can find one). Without going into the finer details of home insurance, most homes are insured with a type HO-1 policy, which covers the average home from losses from the standard dangers (fire, storms, etc.). Historic homes usually warrant an HO-8 type policy, which covers replacement or repair. Be warned that the policies are more expensive, but your house may be worth it. In some cases, the insurance policies are only available to homeowners who own houses that are nominated or listed on the Historic Register, or be in a recognized historic district.
What about getting regular insurance?Most historic home owners (myself included) opt for standard homeowners insurance, which does not cover replacement of their homes. The premiums for truly complete coverage are too high, and we must weigh the possibility of catastrophic loss against thousand each year.However, often there are problems getting even standard insurance on an old house. In particular, some insurer's are hesitant to insure old house wiring or plumbing. Insure.com has an interesting article on knob and tube wiring. Some will consider insuring knob and tube if it has been completly (and recently) inspected. Others will not insure at all, or decide on a case by case basis. You will often find that insurance companies balk at older homes, simply because they believe old homes to be "ready to collapse". Old plumbing, wiring, sewer, or furnaces are a risk. In some cases, refusing homeowners insurance because of age or repair is considered 'red-lining', and is not legal. Do your research. Insurance CompaniesHistoric House Insurance Program217 E Redwood Street, Suite 2100 Baltimore, MD 21202 800-899-6004
Chubb Group Middlesex Antique Home Insurance offers coverage and benefits for owners of Pre-1930's homes.
Firemans Fund Allstate Insurance offers Deluxe Select Value Homeowners insurance, often purchased by those who see a disparity between the market value and replacement cost of their dwelling.
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Last updated 2/18/00