Older homes can be difficult and sometimes expensive to insure. This is because they present a risk due to older plumbing and electrical as we as the general aging of the building materials. Even an older home that has been renovated may still run into difficulty obtaining home insurance.
Fortunately, there are a lot of companies out there that have created excellent older home insurance programs. There is no reason you should have to compromise on coverage or value when choosing your homeowner’s policy.
The Basics of Home Insurance for Older Homes
Insurance companies have a few main concerns when it comes to insuring an older home. Those are the wiring, the plumbing, and the roof, all of which present a higher risk of damage to the home. Other issues that can cause you to run into difficulty getting insurance are unusual building materials and original appliances or wood stoves. While those last items add charm to your home, the insurance company sees an expensive claim.
Older homes need the same basic coverage as any other home; dwelling and other structures, liability, and personal property. The dwelling coverage is often the most difficult area.
Some insurance companies will try to insure an older home on an actual cash value policy; avoid this at all costs. While the value of an old home may be lower due to age, the cost to replace such a home is often higher than expected – especially if the home has special, ornate features or is built with unusual materials. It is important to make sure you are insuring your home on a replacement cost basis.
An older home also needs extra protection from potential water damage, especially if the plumbing is original. Water and sewer backup coverage is usually an extra endorsement, but well worth the cost.
The wiring in your home will be a particular sticking point for insurance companies. Some types of wiring are a high risk of fire, and many insurance companies simply won’t write a policy. Updating your wiring is the best way to open up your insurance options. You may need to go with a specialty insurance company until that work is done, but it will be worth it in the end as you’ll get better rates.
Specifics of Home Insurance for Older Homes
While most older homes, as long as things have been updated, can qualify for a traditional homeowner’s insurance policy, there are some specific situations where a different policy might be needed.
Historic home insurance policies are designed for a home of a certain age and historic value. These specialty policies provide replacement cost coverage that will protect the dwelling thoroughly, even with expensive materials and unique features. They will also cover all of your restoration efforts and will repair the home with materials as close as possible to the originals. This type of insurance is a bit more expensive, but it is also far more comprehensive and worth the cost if you have a higher-value historic home that has undergone restoration.
Specialty (non-standard) policies for older homes that are lower in value and in need of renovation is also available; these homes often do not qualify for standard policies. Some of the coverage is more limited on these policies – for example, they are often “named perils” which means you are covered only for those specific risks listed on the policy. This type of coverage will give you basic protection if you do not have another choice, but as soon as you get some renovation work done you will want to shop around.
Our choices for older home insurance take into account the various different situations we mentioned above. That means that not every recommendation will be the right choice for every home, but that there will be at least one recommendation to suit every home.
We looked for companies with a very strong reputation, particularly in the case of higher value and historic homes. Because those claims can be very expensive, the ability of the insurance company to pay – and their reputation for paying – are very important. Of course, our picks for less valuable homes also stand up to the scrutiny of their reputation.
All of our picks will provide replacement cost coverage to make sure your home is rebuilt properly after a claim. We also looked for insurance companies that give you discounts for making upgrades to your home, so that you can see your bill go down as you complete your renovations.
Our Top Recommendations
These three top picks will provide an insurance option for every older home, from that beautifully renovated Victorian to a WWI fixer-upper.
CHUBB is known for insuring higher-value homes; this includes historic homes as well. If you have a higher-value historic home, especially one that has been restored using original materials, Chubb is the company to call. They are a partner company to the National Trust for Historic Preservation, so they have the seal of approval of the experts.
CHUBB products are not cheap, but they are of the highest quality and include above-and-beyond coverage for things like replacement cost, loss of use, and more. The company is also an enormous multinational corporation with the finances and the reputation to handle your historic home.
State Farm covers homes more than 100 years old that have been properly maintained, making them a good pick if you need a standard homeowner’s policy for a fairly basic older home (very ornate or very large homes might not qualify, but are better off with a historic home policy anyway) in good condition.
State Farm is the second largest home insurance company in the country and their homeowner’s program is comprehensive and has a lot to offer in terms of options. They always rate highly for customer service and have the financial strength to cover their customers.
Foremost makes our list as a pick for those who have an older home that does not qualify for standard insurance. Their specialty homeowners does not force you to cut coverage – they offer the option of extended replacement cost and not only actual cash value along with a long list of add-on options that give you a policy just as comprehensive as a standard package anywhere else.
The company is owned by Farmers, one of the biggest insurance groups in the country, and is big enough to give you peace of mind. You can also get multi-policy discounts not just with other Foremost policies, but with Farmers products as well.
Shopping for Older Home Insurance
A lot of older homes can be insured on a regular homeowner’s policy, but before you assume you’re in good shape, make sure to look at the details of the policy. When shopping for your new coverage, make sure to check for the coverage that is a must. As mentioned above, that means replacement cost coverage and the option to add on extended coverage like water & sewer backup.
Be prepared to shop for insurance by having a thorough inspection done of the home. This way you will be armed with the answers to all the questions the insurance company will have regarding what’s been renovated and the condition of things like the roof, wiring, plumbing, and any original appliances.
Make sure that you are always comparing an apples-to-apples quote. The rates for a named perils policy versus an all-perils policy, for example, are not a fair comparison. Keep those differences in mind when looking at your options from various companies; sometimes they will quote you named perils or actual cash value just to make the rate lower.
The Bottom Line
Older homes offer that favorite of all descriptors, character, but it comes with some extra insurance concerns. Make sure you have investigated what type of insurance you will need and what that bill will look like before you start making offers on the older home of your dreams; the cost and difficulty can come as a surprise otherwise.
For a list of companies that we recommend, visit our Best Insurance Companies page.