If your historic home was severely damaged, but not enough to declare a “total loss,” does your policy have high enough coverage limits to repair and restore the building? And will your insurance company pay to hire experienced restoration craftsmen if you have a fire?
These are just some of the questions you need to consider when insuring your historic property. The following are a few tips to help lower your insurance costs and ensure you have the right amount and proper kind of coverage.
1. Increase your deductible.
Most insurance companies give significant premium credits for higher deductibles. Nothing jeopardizes coverage availability and price stability quicker with insurers than several small claim submissions. Increasing your deductible to $1,000, $2,500, or $5,000 is a great way to offset the increased premiums associated with insuring your building properly.
2. Insist on Guaranteed Replacement Cost coverage.
Insist on Guaranteed Replacement Cost coverage with an insurance company whose claims philosophy allows for the restoration (not just replacement) of your historic home. This would cover you for the full cost of rebuilding, or restoring, regardless of policy limit. Guaranteed Replacement Cost is essential for full protection. Some insurers no longer offer this coverage, or sell it at 115% or 125% of the policy limit, but it is available. Ask your real estate agent to help you find out who offers Guaranteed Replacement Cost for historic homes in your area.
3. Consolidate policies with one insurer.
When possible, consolidate policies with one insurer to achieve package discounts, avoidance of coverage gaps, and easier administration, particularly if common effective dates are used.
4. Itemize significant valuable items on a Fine Arts floater.
With a Fine Arts floater you will be able to avoid policy sub-limits and deductibles, as well as obtain breakage coverage for fragile articles and agreed value for your valuables. Fine Arts coverage is broadly defined, with most insurers able to include painting, sculptures, oriental rugs, folk art, multimedia art, antiques, and other items of rarity or significant value that do not otherwise have a coverage schedule (such as furs). This coverage is typically very inexpensive to purchase.
If your house is built of brick masonry, a durable and fire-proof material, you may qualify for certain credits.
5. Take advantage of credits.
Insurers offer many “credits” that lower the cost of insurance for homeowners who have taken steps to reduce risks. Consider installing central station monitored fire and burglar alarms. Credits are also available for buildings in gated communities, that are built or renovated with masonry construction, and that have had system upgrades. “Loss free discounts” may be given to clients who have not made a claim in a specified time period, usually three years.
6. Purchase All Risk coverage on dwelling and contents.
Many homeowners’ policies are written on a named peril basis, which provides more restrictive coverage.
7. Choose a quality independent agent or broker.
One example is the National Trust Insurance Services
, who has experience insuring historic properties and can offer you sound advice. Your insurance agent is a financial advisor whose job is to protect what matters most to you in the event of loss.
This article was previously posted November 8, 2016 on www.savingplaces.org