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Insurance Basics

Many homeowners mistakenly insure their home for the pruchase price or market value.

In the shadows of evening lighting I can see marks in the paneling of our Keeping Room where the boards were hand-planed. I love these marks. Should a fire or terrible roof leak damage them I would be devastated, and you can bet I would expect to get them replaced by my insurance claim. Unfortunately, too many of us with older houses do not realize that our insurance policies will not cover replacing these hand-crafted elements should a loss occur.

Many homeowners mistakenly insure their home for the purchase price or market value. Antique homes are often purchased at prices much lower than what it would cost to rebuild them, and have details that are not easily or inexpensively available today. Also, standard insurance policies look at room count, square footage and type of construction, then determine value from standardized tables of costs based on new construction. In settling a claim, your loss is considered based on these standard costs and your insurance may not pay more. The cost of putting up a drywall ceiling (the standard for most new construction) versus replacing the lime, sand and hair plaster in your antique home is very different. If you expect to receive “like and kind” coverage from your homeowner’s insurance should you have a loss, you had better review your policy carefully.

Special insurance programs for historic buildings have been around since the early 1990’s. Homeowner’s insurance guaranteeing replacement costs are more expensive (20 – 50 percent), but they will save you thousands out of pocket in the event of a loss. These policies better evaluate the architectural details, place appropriate value on the one-of-a-kind elements in an older home, and have much better risk and property coverage. They also set higher limits for contents which can be most appealing for those seeking to decorate their period home with period furnishings.The average insurance policy is often limited to a drive-by appraisal, or a home appraiser who is not trained to assess historic components. This will significantly shortchange your home, and potentially leave you under-insured. Very differently, old house insurance programs generally have preservation, or at least trained, professionals on staffs who thoroughly appraise your property when the policy is written, usually setting the value well above the market price. This is important because homeowners insurance should not be based on what your house could sell for (though this is in the best interest of the insurance company), but rather what a loss would cost to replace (what is in the homeowner’s best interest). These appraisers will closely document your home room by room, photograph millwork, and note unique details. These detailed descriptions become part of your insurance contract, guaranteeing that you can replace damages without having to fight with your insurance company, or pay for them yourself.

Check for phrases such as “(guaranteed) replacement cost” and “extended replacement cost”. If you have a complete loss, extended replacement coverage means the insurance company will cover the loss even if it costs more than your coverage amount. Many companies have taken this valuable feature out of policies or capped the coverage at 120 to 150 percent. Old house coverage also makes allowance for “rebuilding to code” which is essential. Many town enforce building codes such as electrical, plumbing and fire codes during a rebuilding effort. If your policy does not include rebuilding to code coverage, you will have to pay for these upgrades yourself. Go over your fine print carefully, and revisit your homeowner’s insurance policy annually to be sure coverage is current.

The best programs available seem to be offered by Chubb ( and Middlesex Insurance Companies ( Personally, we priced them both and found Middlesex’s Restorer’s policy extremely price competitive, were very impressed with our appraiser’s knowledge and consequent report, and are happy with the customer service we have received to date.

Noelle Lord operates Old House C.P.R., Inc. with husband Peter, and specializes in restoring historic surfaces and helping folks take good care of their older homes. They complete restoration projects, large and small, throughout the New England area. She writes from her own old house in Limington, Maine and can be reached at (207)793-2957 or