Published March 04, 2013
A home in Massachusetts has been in the same family since it was built in the 1600s -- less than 20 years after the Mayflower landed. Though nearly four centuries have passed, one room in the home remains just as it was in the 1600s, with the same hand-hewn floorboards.
There are special -- and more expensive -- historic-home insurance policies to protect houses such as this. But they vary in what they'll pay for. You might be able to replace 1775 windows with something close to the real thing, or just historic look-alikes.
You may be able to get by with just a standard homeowners policy for your little piece of history, as long as you understand what that policy will and won't provide if the home is damaged. Replacement materials might be limited to whatever is affordable at a home improvement store.
Your home doesn't have to date back to the Revolutionary War or earlier to have some history, so protect it by asking these four questions as you shop for the right insurance.
Is my home historic?
If your house is within an official local or state historic district and you've agreed to include it in the designation, any repairs or changes generally require the approval of the preservation group that oversees the district, says Richard Standring, a regional manager with Fireman's Fund Insurance Co., which insures the Massachusetts house from the 1600s.
The preservationists may require you to replace 18th-century windows with the real thing, or match paint colors to those used at the time the house was built. And the potential for those sorts of demands can increase your insurance needs -- and costs.
Given the requirements, some insurers will, in fact, cancel standard coverage for homes in historic districts, forcing owners to buy the special historic-home insurance whether they want it or not, says Ann Gonya, a vice president with National Trust Insurance Services, a Baltimore company affiliated with the National Trust for Historic Preservation.
You could opt for special coverage even if your home isn't officially "historic."
To insurers who may have to replace and restore hard-to-find features, "historic" generally means 1940 construction or earlier, because the building materials used are more difficult to replace, the construction methods are more dated and insurers will want to know more details about wiring and plumbing, says Gonya.
And a house that's newer could still be considered historic if you've built it with reclaimed, vintage features such as now-extinct chestnut or other specialty woods from an older home, she says.
What does historic-home insurance cost?
Historic-home insurance policies cost about 20% more than your standard homeowners insurance, says Loretta Worters, a spokeswoman with the Insurance Information Institute, a New York-based trade group. The price depends on the size of your home and its historic features.
As with a conventional homeowners policy, the higher the deductible, the lower the premium. Some customers carry $50,000 deductibles, Gonya says.
Premiums also depend on your home's location, including its proximity to a fire station, hydrants and water sources, and whether you've installed alarms or other systems that monitor for signs of trouble.
In the 17th-century Massachusetts home, for example, Fireman's recommended additional heat detectors in the attic and a water flow monitor throughout the house -- because water causes more insurance losses than fire.
What do I want the policy to do?
Be careful about cutting coverage to hold down costs. Your biggest decision revolves around the issue of replacement coverage if there's a fire or flood.
Most owners assume that standard home insurance will replace everything just the way it was, so if a fire damages their wide-plank floorboards from the 1860s, they can hunt down similar 1860s flooring and their insurance will pay for it.
But that's not usually the case. With a regular homeowners policy, you'll get new flooring, all right, but it'll be ordinary stuff from a local supplier.
Historic-home insurance can offer "guaranteed replacement coverage with restoration," considered the best option for the owner of a vintage home, say insurance experts. It means the insurer will replace the original material with the same thing, if it's available -- called "like-kind replacement."
But the policies don't come cheap because materials are tough to find and costly. And they'd need to be installed by craftsmen who know how to use centuries-old construction techniques.
Where do you find historic-home insurance?
Contact your local and state historic preservation offices to find these policies.
Tracking down and buying adequate historic-home insurance is worth the effort when your home is a gem that has stood the test of time, like the Massachusetts house old enough to have hosted some of the Pilgrims.
"You have over 300 years of ownership in one little house," Standring says. "The house is a living museum."
Copyright 2013, Bankrate Inc.