Insurance and Historic Properties

Has anyone else heard of homeowners in their communities having difficulty getting homeowner's insurance because they are located in a historic district? I've just heard of one community where a property owner was denied coverage because the insurer claimed that repair/replacement costs for properties in historic districts would be higher than other claims.

Is anyone else experiencing this?

Alabama:

• A property owner in a proposed NR historic district raised this same issue at my first review board meeting as the new NR Coordinator last October. People started laughing. Apparently, this is a rumor that floats around but in Alabama, at least, it's not true.
• I think it depends on who you are, where the property is and which insurance agency it is. Because I do know of one case in Alabama where this happened and it was only a few years ago. I was working with the property owner who lives in New Jersey but the house was in Ozark, a town in the southeastern part of the state. I don't know what company it was, but they were already insuring the house. When it was placed in the Alabama Register, not even the National Register, they dropped the coverage citing replacement costs. I offered to write a letter from our office explaining the facts, but when the property owner called the insurer, they said it wouldn't be good enough for them to keep insuring the property. She initially called me asking if I knew of companies that specifically insured historic houses and I referred her to the National Trust. I don't know if she ever got insured.
  

Colorado: I believe the National Trust looked into this issue a few years back and found companies that did not have this practice. It might be worth checking with the Trust.

Illinois: We have had people in historic districts have their coverage dropped specifically because of the replacement-value issue. We even held a session at our statewide preservation conference on the topic about 4 years ago. Chubb and Fireman's Fund were mentioned as two companies that would insure historic buildings. But it was unclear at what rates (insured as a house vs. insured as a work of art). And certainly the information generated would now be out of date. This kind of dropping of coverage seems an uneven and unpredictable occurrence. But it has happened. In our experience, it's not consistent within a particular district or among a particular company or agency. It's rather a mystery how a firm even knows that a particular property is landmarked (and in what way) in order to drop its coverage. All of our NR districts are viewable online in Illinois, yet we haven't witnessed an increase in this occurrence. It also doesn't seem to be linked to properties that take our statewide residential financial incentive. Thankfully, it hasn't turned into a widespread issue, and indeed seems to have died down recently.

Iowa: I live in a 1905 home located within a historic district and have not had problems finding insurance on our home.

Minnesota:The March/April 2009 issue of Forum News, published by the National Trust, has an article about insuring historic buildings. The author, Genny Dill, works with the National Trust Insurance Services. Their toll free number is 866.269.0944.

Oklahoma:The Oklahoma SHPO has received a few calls over the years about this issue. We always suggest the property owner just contact another insurance company. Since insurance companies can refuse to insure whatever they do not want to cover, you just have to move on to someone else. In a couple of instances, we did find that the insurance company's agent had the wrong idea about what listing in the National Register really meant and that was their basis for refusing to insure a house.

Pennsylvania: Well, that does make sense and I am not surprised to hear it. If a slate roof on a historic house in a historic district catches fire the cost of replacing a slate roof is astronomical. So, yes an insurance company may indeed balk at replacing in kind. There are insurance companies that will insure historic houses. See Chubb Insurance Company as an example and an article from their website below.

FOR IMMEDIATE RELEASE

Chubb Group Of Insurance Companies Becomes Sponsor Of National Trust For Historic Preservation Organizations Launch Insurance Program for Historic Homes Washington, D.C. (January 31, 2001) - The Chubb Group of Insurance Companies has signed on as a corporate sponsor of the National Trust for Historic Preservation, the nation's leading preservation organization, and has launched an insurance program for owners and occupants of historic private residential homes.

Developed in cooperation with the National Trust, the Historic and Valuable Home Insurance Program addresses the unique exposures to loss associated with the ownership, restoration and occupancy of historic homes. Unlike many typical homeowners' policies, the program provides coverage to replace an historic home's special architectural and historic features with the same quality, material and workmanship.

"The Chubb Group of Insurance Companies has a celebrated, century-old history in the U.S. and an enduring commitment to integrity and innovative business practices," said Richard Moe, president of the National Trust. "By recognizing the unique needs and distinctive traits of historic homes, Chubb is helping to save America's historic places by encouraging people to own and live in these special properties without fear of their being inadequately protected against damage or loss. The National Trust is proud to have Chubb as a sponsor."

"We are proud to be working with the National Trust for Historic Preservation, which has been a tremendous resource and voice for the owners of historic homes," said Ellen J. Moore, senior vice president and managing director of Chubb & Son. "The program we have put together with the National Trust provides unparalleled protection for historic properties. Whether or not they are required to restore their historic home to the way it was before a loss, the program enables owners to recreate the aesthetic qualities they love in the home and maintain the investment they have made in it."

The Historic Home Insurance Program also includes coverage to repair or replace homes so that they conform to current building codes. Other significant features of the program may include:

Extended Replacement Cost Coverage, enabling the owner to rebuild even if the cost to do so is greater than the amount of coverage stated in the policy. In recent years, many insurers have eliminated or capped this coverage.

Replacement Cost Coverage, which automatically pays for the full cost to replace all belongings, from sporting equipment to antique furniture, up to the limit in the policy, so valuable possessions are covered without deduction for depreciation.

All Risk Coverage, which helps protect against all types of causes of loss perils, except for those listed in the policy as exclusions. In contrast, standard policies only provide coverage for a few listed causes of loss.

Insureds may be entitled to a residential appraisal to help determine the proper type and amount of coverage they should carry. Chubb's appraisers, who are trained in architecture and interior design, historic home preservation, and security and fire safety evaluation, can also make recommendations to help protect families, their homes and valuable possessions from intruders, fire and other hazards. Chubb also maintains a network of outside consultants, including homebuilders, interior designers, restoration specialists, and security and fire safety engineers.

Historic homeowners and occupants who own a significant amount of antiques, collectibles and art can also purchase Chubb's Valuable Articles Coverage through the program. In addition, they may purchase coverage for automobiles, watercraft and personal excess liability.

The program is being offered through MIMS International, a leading North American program administrator based in Towson, MD. For more information on the program, contact Bob Bounelis at MIMS International at (800) 899-1399 or Bob@mimsintl.com.

The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property and casualty insurance for personal and commercial customers worldwide through 5,000 agents and brokers. Chubb's global network includes branches and affiliates throughout North American, Europe, Latin America, Asia and Australia. Chubb is a leading insurer of fine homes, automobiles, jewelry, art and antiques and yachts. The readers of Worth Magazine named Chubb best in homeowners insurance for a second year in a row. The magazine cited Chubb as catering "to people who want to make sure they'll be able to duplicate exactly what they've lost." For more information, visit the company's web site at www.chubb.com.