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Historic homes – the trials of insuring them

June 2, 2009
Bill Willis

Bill Willis, Owner & Managing Partner - Founders Insurance Group

Connecticut is home to some of the finest and oldest historic residences in the nation – many of which are on the National Register of Historic Houses, located in the historic districts of the towns and are nowhere near a paid fire department. So, what does this have to do with insurance? A lot. Not only are historic homes a challenge to insure, they are more costly than the standard homeowners policy to insure – if they are insured correctly. If there is ever a situation that applies to the old saying “You get what you pay for” then it’s this one. If you own one of these homes, or are thinking of buying one – get the advice of a trusted insurance counselor – don’t try buying this insurance on-line without advice. These insurance policies are often quite complicated and you truly need someone who not only understands the area in which the home resides, but you need someone who understands this specific area of insurance.

Let me try to explain why it’s complicated and why it’s more costly than the standard homeowners policy to insure these one of a kind homes…

A typical home can be insured with replacement cost coverage – historic homes cannot as they are treated like antiques and are in essence priceless. Your home may be valued at 1.5 million dollars BUT to replace that home with all the historic qualities could cost 2 million dollars. This phenomenon doesn’t typically happen with new homes. Historic homeowner’s policies take into account the special craftsmanship and materials used in the home, and also the cost of a specialized craftsman to replicate it should it be destroyed.

Properties located in Historic Districts might need the approval of that district’s commission, zoning approval or city/town approval before reconstruction can occur – and those groups may REQUIRE that specific materials (often original) be used to preserve the historic authenticity of the area.

Many of our small Connecticut towns have only volunteer fire departments and/or sparse or non-existent fire hydrants – this poses an issue for historic insurance underwriters. The farther away you are from the firehouse and/or hydrant – the tougher it is to insure, and the more expensive your policy will be. Insurance carriers might also require local underground water tanks, sprinkler systems and other preventative measures before they will insure you (depending on the homes replacement value). Many of these historic homes are made of wood – old wood – and often are quickly destroyed during a fire – this increases the risk for the insurance carrier and in turn makes the policy more expensive.

Carriers that specialize in insuring these homes, such as Chubb (www.chubb.com), Ace (www.aceprivateriskservices.com) and Middleoak (www. middleoak.com) recognize the significant architectural value of these properties and offer coverage that will include restoration consultants and specially trained appraisers at competitive premiums.

Worried about your current coverage – call me at Founders 1-800-762-7369. Our Founders Platinum team members are experts in the historic home field.

Bill Willis

Owner & Managing Partner – Founders Insurance Group

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