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Owners of historic homes treasure them. They have often painstakingly restored them to their original condition. While any property damage loss presents difficulties, they are much greater when restoring a historic home. The goal is not to simply replace a home, but to restore an architectural work of art. The goal is restoration, not merely replacement.
Long-time owners of historic houses are usually aware of their special insurance needs, but persons who buy homes in historic districts may not be as aware. They may not understand that their homes must be restored in specific ways in case of fire or other damage, and will likely be unpleasantly surprised when their standard homeowners policy does not respond as needed. |
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Here is a possible loss scenario:
Paula and John own a 1928 California bungalow. It is on the National Register of Historic Places because it is located within a neighborhood that is part of the National Register. They agree to open their house for a neighborhood fund-raising tour, and
300 people tour their home.
Molly and her three young sons are on the tour. The youngest gets away from her and conducts his own tour. In particular, he investigates how the wax from the candles pours onto his hands. Unfortunately, the flame ignites the living room curtains and the house must be evacuated. The living room and front porch sustain fire damage while the rest of the house sustains smoke damage to varying degrees.
The house's interior walls are all plaster. Paula and John's insurance company says it will pay for replacement using drywall. The insurer says it will replace the home's finely crafted woodwork with materials currently being used in new construction. The cost to replace the porch does not take into consideration the restoration required by the historic review board. Paula and John are also without electric power because the housing inspection following the fire revealed that their electrical system does not meet the current code and must be upgraded before the electric utility will restore power. They turn to their insurance carrier and discover that there is no coverage for the needed upgrade.
Paula and John must take out a second mortgage to cover their portion of the loss. |
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Historic homes are not defined by a time or a place, or even by a listing on the National Register. Bill Hall, national marketing manager at MiddleOak, explains, "For our Restorationist® policy, we look at homes built prior to 1930, whose main construction and interior features have been preserved or restored. Although protecting homes on the National Register requires unique considerations even beyond those of an antique home, we welcome those homes as well."
"Chubb Personal Insurance looks at each home it insures and its individual characteristics to help guide appropriate coverage choices," says Christie Alderman, vice president, new products & services manager for Chubb Personal Insurance. "We understand that a distinct shift in home construction techniques occurred in the post-World War II construction boom and that it can be more costly to replace homes constructed before this time. Some of the reasons are replacing plaster and lath, hand-hewn nails, or post and beam construction. We also understand and take into consideration a home's architectural history, connections with significant historic events or people, unique architectural methods, and engineering achievements."
A key element of insuring historic homes is adequate valuation. Ms. Alderman explains, "Chubb offers complimentary in-home appraisals to help our customers make sure they are prepared in the event of a total loss to their home. A Chubb appraiser can visit the home to note architectural details and interior features, and then estimate the replacement cost. Appraisers frequently research the prices of individual components within the home to help recommend an appropriate insurance value, even for the most unique homes. Many of our appraisers have backgrounds in historic preservation."
MiddleOak also addresses the uniqueness of each home. According to Mr. Hall, "Our agents can use our estimator tool, but many prefer to call us to discuss the specific home. We then inspect every home to make sure the value is a good estimate. It is fascinating and diverse as to what we find inside these homes. When you see someone literally crying tears of joy because you preserved their personal piece of history is when you realize that you are doing something special. We will replicate the home, and our policy has no dollar limit on restoration cost in case of a total loss. That is the cost to restore, not just replace with new materials. We make it just like old again."
Ms. Alderman states, "After a covered loss, Chubb will pay to have the home repaired or rebuilt to its original beauty – even if the cost exceeds the policy limit. Additionally, in the event of a total loss, and if the customer decides not to rebuild or to rebuild at another location, Chubb offers a cash settlement, up to the policy limit."
Historic home insurance covers the cost to replace damaged plaster walls with plaster, not drywall, and replication of construction techniques used in the period. Instead of paint rollers or sprayers, the walls may be painted by hand. An artisan may be called on to cut wood and dry it in thin pieces to rebuild the interior walls the way they were built over 150 years ago. Antique flooring may be required to match the period, which may involve the use of special aging techniques.
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