Is your home a piece of history? Here's what you need to know about insuring it

Amy Higgins

The unique architecture and craftsmanship of historic homes are enticing to many homebuyers, and if their walls could talk, you'd get an earful about the happiness and heartache that former owners experienced. Homebuyers want to create happy memories of their own when they move into a historic home, but that expectation could come crashing down if structural problems arise and the homeowner is inadequately insured.

Special needs

A historic home requires unique home insurance coverage. Homeowners generally have two choices when it comes to insurance: cash-value home insurance and replacement-value home insurance. Cash-value insurance covers only the market value of the home what it would currently sell for), while replacement-value insurance covers the costs up to certain limits) of rebuilding.

If you don't plan on rebuilding your historic home if it's destroyed, cash-value insurance could save you some money in premiums. But if you do, the one-of-a-kind features of a historic home may not be taken into consideration when an insurance provider establishes its cash value.

Specialty insurers and mainstream companies alike offer plans for historic treasures. Elliot Whittier Insurance, Fireman's Fund and National Trust Insurance Services, for example, appraise historic homes individually and establish each property's replacement cost to come up with an appropriate insurance rate.

A historic home policy may cost more than a standard home insurance policy, but that's because a tailored policy addresses the special needs of a historic home. For instance, building codes were not established until after the 1930s, so owners of historic properties might be required by local officials to get their homes up to par with building laws after a loss, according to Elliot Whittier Insurance, which offers a plan called the Restorationist Program. For instance, the company points out, a historic property owner may be required to reinforce the entire structure, replace the electrical system or move the home farther back from the road.

Damage to a historic home may require special attention, regardless of the extent. Properties in a local historic district may need the district's approval on repair or restoration work and may require that original material be used, according to the Connecticut Trust for Historic Preservation. Under a proper historic house policy, the insurance provider would find a skilled company to repair or rebuild the damaged home with the appropriate materials to ensure the home maintains its historic character while complying with building codes.

Stay on top of things
Be sure your home undergoes a thorough inspection if you're looking to buy a historic home. All the special features that make a historical home unique also can come with a hefty price tag -- removal of insulation with asbestos, for instance, or repairing an unstable foundation could turn your dream home into a money pit.

The Insurance Information Network of California says it's typically less expensive to get insurance for a home that has been updated to comply with current building codes than it is to insure one that is not updated. By getting a detailed report of your potential home's condition, you'll have a better understanding of what you're getting into before you buy.

It's important for historic homes owners to be on the ball for many reasons. Regular maintenance will help minimize damage down the road as well as preserve the home's value for future generations, according to the Delaware County Planning Department in Pennsylvania.

The Delaware County Planning Department suggests historic property owners develop a timetable for maintaining, improving and repairing items that need attention, such as roof coverings, gutters, downspouts, chimneys, windows and doors.

Historic homes can be a challenge, but with proper home insurance and ample attention, they can be worthwhile investments.

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