When a property has been destroyed or severely damaged in an accident or incident, the property owner’s first thought will likely be on rebuilding. For historic properties, which often come with older building materials or complex and historically significant building techniques, the thought of repairing or reconstructing the property can be overwhelming. However, if the property has Historic Replacement Cost insurance coverage, it can be done.
Historic Replacement Cost coverage is designed to restore or repair a historic property with all of the same materials, building techniques, and architectural features that it originally had. However, before this can be done, an appraisal must be completed. This appraisal will determine precisely how much it would cost to restore the property to its original state.
No two properties are the same, and when it comes to historic commercial properties, details like intricate hand-carving or materials that are no longer commonplace in today’s construction can drastically affect the cost to rebuild or restore. Even between two examples of the same type of property (such as two historic theatres, or two museums), the replacement cost can vastly differ. This is where historic property appraisals become crucial.
The Need for Historic Insurance
Reworking a damaged historic property is not the same as reworking a standard property. The materials may be difficult to match, it will likely require more time to rebuild, the project will require skilled craftsmen who specialize in those styles, and other professional services may need to be involved in order to recertify the property and recover the tax benefits from the property.
Standard insurance policies cannot provide an accurate estimate of historic properties’ values, nor are they capable of covering the replacement cost or of guiding the property owners through the full restoration process. A historic property with a standard property insurance policy would be severely underinsured.
The Historic Appraisal Process
For standard properties, an appraisal does not require nearly the same amount of work as historic properties. In fact, most contemporary properties can use automated costing systems to provide an accurate appraisal and replacement cost.
Historic property appraisal, on the other hand, is a five-phase process:
- Initial contact. During this phase, the appraiser will establish contact with the owner, verify the building information, and schedule the appraisal.
- Onsite assessment. This entails reviewing all relevant documentation, determining the property dimensions, performing a walk-through, taking photographs and other evidence, and interviewing all parties with knowledge about the building.
- Research. This includes online research as well as meeting with contractors, architects, artisans, and craftspeople.
- Valuation. Using a combination of national building construction databases, the appraiser will then determine the property’s replacement cost.
- Compilation and reporting. Once that is completed, the appraiser will gather their findings and present them in an efficient report.
Historic Appraisal Services
In 2002, National Trust Insurance Services founded Historic Appraisal Services, its exclusive appraisal company that specializes in historic replacement cost appraisals for historic properties. Our team of specialists has appraised a combined thousands of properties across the United States with historical significance, and we have the expertise and experience to help restore historic properties to their former glory.