Insuring Your Historic Home—Are You Protected?

January 2017

When you live in a historic home, it’s especially important to make sure your homeowners’ insurance policy provides the right coverage to protect your investment. Unfortunately, many homeowners don’t realize they need to purchase extra coverages for special situations that commonly arise. When building an insurance policy to protect your historic home and assets, work with an agency that specializes in insuring historic homes. Simply making a few calls and going with the cheapest quote could wind up costing you thousands of dollars in out-of-pocket expenses in the event of a claim. The following coverages, (‘endorsements’ in insurance lingo) will add a few extra dollars to your policy cost, but the peace of mind will be well worth it.

  1. Building Codes Coverage — If your home is damaged, extra rebuilding could be required to make your home compliant with current safety regulations. For instance, city ordinances sometimes require older homes to be rebuilt with upgraded electrical equipment, roofing materials, or plumbing systems. Without building codes coverage, this cost would fall to you.
  2. Sewer Backup and Sump Pump Failure Coverage — In some areas, aging sewer lines are stressed to the max and as more homes are connected to these out-of-date lines, sewage backups can occur. When a sewer backs up into a home, it can damage floors, walls, furniture and electrical systems. Or, heavy rains or melting snow can cause water to back up into basements if your sump pump fails to work properly. These situations are not covered by a basic homeowners’ policy.
  3. Additional Living Expenses Coverage (ALE) — Additional living expenses coverage will pay the necessary increase in living expenses required to maintain your family’s current standard of living while your house is being repaired. Covered expenses typically include hotel costs, food bills in excess of normal grocery/restaurant bills, cooking supplies and the cost of storage for your personal property. Keep in mind that ALE coverage is available only when the insured property is uninhabitable because of a loss covered under the homeowners policy.

Owning and living in a historic home can be a lifelong dream and goal. Take the time and effort to make sure your homeowners’ insurance policy is written properly and provides the coverage you need to bring your home back to a pre-loss state in case of a claim. Adequate coverage will help preserve your asset—and your sanity.