Homeowner's Insurance

Homeowners insurance for historic Virginia properties: A Guide

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October 18, 2021

Virginia’s many historic homes are full of old-world charm and unique architectural features, but there are a few things to consider when shopping for a homeowners insurance policy for an older property.

What to know about insuring an older or historic home in Virginia

A home is typically considered historic if it’s over 50 years old. Some homes can be honorarily designated as a historic landmark that allows the owner to qualify for tax breaks and low-interest loans.

Even if your property is listed in the National Register of Historic Places or Virginia Landmarks Register, you aren’t required by state or federal law to preserve the home’s historic appearance. However, many owners of historic properties and historic districts are concerned about maintaining a home’s historic characteristics.

The standard level of homeowners insurance coverage required by Virginia law may not be enough to protect an older home, leaving homeowners with fewer options and often more expensive premiums. But fear not, there are options for you to help you get your home properly insured.

If you are considering purchasing a historic home, don’t let this blog post overwhelm you. There are many reasons why homeowner’s insurance may be more expensive for an older home, but it’s not unattainable. There are many options for you and different levels of coverage, and in most cases you will be able to find a good homeowner’s insurance policy that fits into your budget. You don’t have to memorize this information – that’s what your insurance agent is for. But it can be helpful to have a basic understanding of your options before you call for a quote.

Insuring historic homes vs. modern homes

Historic homes are usually more expensive to repair and replace compared to newer homes. Things like building materials, unique architectural features, and age-related damage can drive up repair costs much faster on a historic property than a home that was built with new materials that are easily available.

Virginia’s minimum homeowners coverage standards require that most homeowners are compensated for the replacement of damaged or destroyed property. However, the state’s insurance regulators know that replacing or repairing historic homes can be more costly than newer homes, according to the state Department of Historic Resources.

Since older homes typically have rarer or outdated building materials, insurers are allowed to apply a surcharge for older houses to account for the extra repair cost. At the same time, insurers can also offer discounts for newer homes that have cheaper repair costs.

State law allows insurers in Virginia to only pay for repairs or replacements of property with functionally equivalent materials at a lower cost. That means if a plaster wall in your historic home is damaged, the insurance company will only pay to repair it using drywall. If the owner wants to use historically appropriate materials to make the repair, they’ll often pay for the difference themselves unless that feature was specifically covered in either an additional insurance policy or as a rider on the existing homeowner’s insurance.

Qualifying for homeowners insurance

Some insurance providers avoid insuring historic homes because of the increased risk associated with older properties.

The best way to navigate the homeowners insurance hurdle is to find an insurance provider who would be willing to insure a historic property before you purchase the home. To qualify for some insurance policies, the insurance provider may require you to update certain features of the structure so they meet modern building codes. For example, a home’s electrical system may need to be updated so it’s safe before you can qualify for a homeowners insurance policy.

Planning for homeowner’s insurance expenses can be intimidating, but you can get a better idea of what your costs will be by asking your agent for a quote before you purchase the home. (This goes for vehicles and any other insurable property, too!) Have your real estate agent get a few details before you call for a quote, such as the year the home was built and a list of updates and renovations that have been made by the current owner.

Extra insurance coverage for older homes

A typical homeowners insurance policy isn’t necessarily the best option for insuring a historic home.

The National Trust for Historic Preservation recommends that for the most coverage, owners of historic properties find a homeowners insurance policy that offers Guaranteed Replacement Cost coverage. This type of coverage allows you to restore your historic home rather than replace damaged or destroyed property. However, these policies are hard to find and are often more expensive. By using an experienced independent insurance agent, you can let them do the leg work for you to find a policy for your home’s unique needs.

To give you an idea of what extra costs you might expect, some insurance providers offer extended replacement cost coverage as an add-on to increase coverage limits by 25-50% beyond your policy limit, according to Policy Genius.

HO-8 insurance policies make insuring an older home easier

An HO-8 insurance policy, also called modified coverage insurance, is designed to cover older homes that may have outdated features that disqualify them from normal homeowners insurance policies. HO-8 policies don’t require a four-point inspection and you may not need to make updates to the home to qualify. The policy offers protection for the structure, your personal liability, and personal property.

If your property is damaged, an HO-8 policy will pay out based on actual value rather than replacement value. That means you will need to cover the remaining amount to repair the damage.

Separate insurance policies for unique features

Some historic homes have extremely valuable architectural and design features that could be worth insuring separately or adding a rider to your insurance policy to cover. This could include things like chandeliers, stained-glass windows, and valuable mantelpieces.  

The National Trust for Historic Preservation recommends insuring these items with a Fine Arts floater to avoid your policy’s sub-limits and deductibles.

Insurance for historic and older homes can be more expensive because there are often more risks involved, such as outdate electrical systems and wood burning stoves.

Why is it more expensive to insure a historic home?

Historic homes can be more expensive to insure due to their age and the cost of building materials. Older properties are usually seen as a higher risk and often have higher replacement costs than newer homes.

Generally, a homeowners insurance policy should equal at least 80% of the home’s replacement cost, according to the Virginia State Corporation Commission. A Market Value Form allows owners of older homes in Virginia to have lower insurance limits that reflect the market value of the home rather than its replacement value.

Homeowners insurance discounts

There are several ways you can save money on homeowners insurance. The simplest way to save is to increase your deductible. Although a higher deductible means you’ll pay more upfront for repairs, it can greatly offset the higher premiums for insuring a historic property.

Other common discounts include:
Upgrade discounts

It’s possible to make upgrades to an older home without jeopardizing its historic look and charm.

Consider investing in upgrades to make the home safer and more efficient. A new roof, updated plumbing system, and a modern electrical system that meets modern building codes can lower your homeowners insurance premiums by making the property less risky to insure.

Payment discounts

You may be able to save money on homeowners insurance by simply adjusting how you pay for your insurance policy. These discounts may include paid-in-full discounts, automatic payments, paperless billing, and more.

Smoke-free discounts

You could qualify for a smoke-free discount if no one in your household smokes indoors.

Home safety discounts

Installing a security system on your home and property could lower your insurance costs. You may also qualify for a home safety discount if you live in a gated community.

Bundle your insurance policies

Many insurance providers offer discounts to their existing customers who already have an insurance policy through them. Bundled policies also make monthly payments easier to track and manage.  

Understand your home’s replacement cost

Your home’s replacement cost will affect your insurance rates. Have your insurer assess your home’s replacement value every few years. At Ronnie Shriner Insurance, we do insurance reviews for our clients every year to re-assess replacement costs, renovations, and more to make sure there are no vulnerable spots in your policies.

Renovating a historic home: What to know

There’s a lot more to consider when renovating a historic home.

If you live in a historic district, you may be required to apply to make any significant changes that could affect the home’s appearance.

Renovations may also be more expensive if you want to retain the property’s historic features and use building materials appropriate for the era of the home.

Insurance considerations for major renovations

1.     Builder’s Risk Insurance

For major renovation projects, builder’s risk insurance can protect you from damage caused during construction.

2.     Vacant Property Insurance

Homeowners insurance policies usually don’t cover damage that happens if a building is left vacant for extended periods of time. Vacant property insurance can be purchased separately or added to an existing homeowners insurance policy.

3.     House flipping

Insurance is very important if you intend to fix and flip a historic property for a profit. You may need to purchase both builder’s risk and vacant property insurance to protect your investment from any accidental damage.

Choose Ronnie Shriner Insurance for your historic Virginia home

Preserving and protecting Virginia’s historic homes is vital for preserving our state’s history, and homeowners need affordable and effective insurance policies.

Ronnie Shriner Insurance has proudly served residents in the Richmond, Virginia area since 1989. Based in Glen Allen, we specialize in tailored insurance plans based on each person’s specific needs, and we’re happy to help you select the best historic homeowners insurance option for you.

Click here to contact us online, or email info@shrinerinsurance.com. You can also call our office at 804-270-0406.

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