Homeowners insurance for historic homes: What you need to know

If you own a historic home, you know they come with uniqueness, character, and quirks. Although you may love your home for those very reasons, its novelty and vintage features can make it difficult to cover with standard homeowners insurance.

Whether you bought your dream historic home to settle down or you intend to renovate the property and flip it, you’ll need to protect it with homeowners insurance. Historic homes can be more expensive and trickier to insure than newer homes because insurance companies see them as high risk due to their older age and pricier building materials.

If you have a historic home, you may be able to find homeowners insurance through the National Trust Insurance Services, a program created to help historic homeowners find property insurance for their specific needs.

What is a historic home?

Everyone has their own definition of what is and isn’t historic, but in order to be considered an officially designated historic home or site, your home must meet certain criteria established by the National Park Service's National Register of Historic Places. The National Register of Historic Places is a national program dedicated to preserving historical properties across the U.S. Additionally, states and municipalities can designate homes or neighborhoods as historic.

When evaluating your property, the National Register will consider three areas:

• Age: The home must be over 50 years old, at minimum, to be considered historic

• Integrity: Your home must look similar to how it looked when it was built

• Significance: Your home must have some sort of cultural significance.If an important person lived in or was associated with the property, or if the home exemplifies architectural or engineering excellence in a particular era, the house could be considered historically significant

Homes that qualify as historic landmarks or buildings often receive perks like tax breaks and low-interest loans. In return, you as the homeowner are responsible for preserving and protecting the home’s integrity and heritage.

That historic preservation can result in pretty expensive rates from insurance companies. For example, if one of the home’s window frames is damaged in a break-in, you may be required to use similar materials in order to replicate the original style of the home. Historic homes have old and rare architectural stylings that cost more to rebuild, which is why homeowners insurance is generally more expensive for historic and older homes.

Why are historic homes more expensive to insure?

A couple of reasons historic homes are more expensive to insure than modern homes is because they generally cost more to rebuild and often pose a greater liability risk because of how they’re constructed. Your home’s replacement cost, not its market value, is one of the biggest factors that insurers consider when determining your rates. It’s possible that your home’s replacement cost, or insured value, will be way higher than the amount you bought it for.

For example, if you own a farm house that dates back to the early 1900s, it’s likely constructed with older, rarer, and more expensive materials that aren’t common in modern homebuilding. Older materials, like plaster walls or wooden beams, are more expensive and potentially not up to code. Whereas more modern materials, like drywall and sheetrock, are generally less expensive and safer to work with. If your home is built with materials that are now considered dangerous, like aluminum wiring, your rates may also be higher, and you may even be required to replace it with copper wiring.

Tips for insuring your historic home

In order to meet the underwriting criteria for standard homeowners insurance, you may be required to make certain updates to your home, such as replacing the electrical work or plumbing. Additionally, since historic homes are more expensive to rebuild, your options may be limited to specialized, high-value home insurance companies.

Here are some other tips you should consider when getting homeowners insurance for your historic home:

Use the National Trust Insurance Services

Consider finding specialized historic homeowners insurance through the National Trust Insurance Services (NTIS), an organization that helps homeowners find carriers that specialize in covering the unique risks associated with older homes. The NTIS works with different insurance companies and can connect you with the right carrier for your historic home’s needs.

Consider a high-value homeowners insurance company

Certain insurance companies specialize in covering high-value homes, including historic houses. Below are two high-value insurance companies that you may want to consider if they’re available in your area.

• Chubb: Chubb offers extended replacement cost policies at no additional cost, as well as replacement cost personal property coverage

• AIG: AIG offers guaranteed replacement cost policies, unlimited water backup coverage, and complimentary home consultation services for homes built before 1945

Consider an HO-8 policy

An HO-8 policy, also called modified coverage insurance, is a type of homeowners insurance designed for older homes or homes with a rebuild cost that is higher than its market value.

HO-8 policies are geared towards protecting older homes that don’t meet the standard for regular homeowners insurance coverage. Unlike a standard homeowners insurance policy, HO-8 policies don’t require four-point inspections, and you may not have to update details of your home, like your old pipes or wiring, in order to qualify for coverage.

However, HO-8s are actual cash value policies, which means you’re only be reimbursed the depreciated value of the property in the event of a loss.

Add extended replacement or guaranteed replacement cost coverage

Extended replacement cost coverage is a coverage add-on that increases your dwelling coverage limits an additional 25%-50% if the cost to rebuild your home ends up being higher than your policy limit.

Guaranteed replacement coverage is similar to extended replacement cost, but it reimburses you for the full amount rebuild costs, regardless of the price. That means if your home is completely destroyed, the insurance company would pay the full amount that it will cost to rebuild your home from the ground up.

How to lower home insurance rates for your historic home

Although homeowners insurance is typically more expensive for historic homes, you can still find ways to lower your premiums. Your insurer may lower your rates if you make slight modern modifications to your home, like replacing your pipes or wiring. You can also consider raising your deductible.

Most insurance companies offer a variety of homeowners insurance discounts, including:

• Married or widowed discount - Insurance companies offer this discount because it increases the chances of someone being present in the home, which decreases the chance of hazards like fire or burglary

• High credit score discount - Insurers may reward you for having a good credit history because it proves that you pay your bills on time

• Non-smoking discount - Smoking is a fire hazard, especially in historic homes that are potentially made of more flammable materials. Insurance companies may discount your premiums if you aren’t a smoker

• Paid-in-full discount - If you pay a full year of premiums up front, you may receive a discount

• Home safety discounts - If you fortify your historic home with safety features, like a burglary alarm, fire alarm, deadbolt, or doorbell camera, your insurer may reward you with a discount for taking preventative safety measures

Learn more about homeowners insurance discounts