Insurance reimbursement for historic properties is complicated—here’s how to prepare
Historic buildings in Massachusetts are often a source of pride and labor of love for their owners. Did you know it can cost as much as 50% more to rebuild a historic home after damage?
Historic buildings in Massachusetts are often a source of pride and labor of love for their owners. Maintaining a property with historic significance can involve extra labor ranging from finding period-accurate colors and building materials to safely upgrading electricity and plumbing to meet modern expectations.
When your historic property is damaged due to weather, fire, flood, or other unpleasant surprise, you will likely discover that the unique details you love about your vintage construction are far more familiar to you than to many building contractors and property insurance agents. That’s important, because it can cost as much as 50% more to rebuild a historic home as a similar-size modern home.
Whether you’re planning for the future or facing urgent repairs, the following five steps can help ensure that your historic property is restored properly with appropriate reimbursement from your insurer.
1) Know the rules
Especially if your house or building is a certified historic property, make sure you understand how the rules of your locality apply to you. Are you limited to using certain building materials? Are you required to upgrade to meet building, ADA, or environmental codes? Depending on the extent of rebuilding and applicable policies, your property may be grandfathered in for some regulations but not others. Understanding these restrictions will help you stay a step ahead when working with building contractors and negotiating with insurance companies.
2) Keep an excellent inventory
This is good advice for all property owners, but with historic properties, details matter even more. A photographic inventory is an excellent way to document features such as antique furniture or artist-designed stained glass, as well as their condition. Making an inventory after the fact is a big job, and the insurance adjuster provided by your insurance company is likely to work from a generic list that could grossly underestimate your total loss.
3) Understand the difference between market value and cash value
This can be one of the most complex aspects of valuing a historic home. The market value of a historic home typically does not match the cost of restoring the home to its original condition. A market-based valuation may not cover fixtures like hand-carved wood, glass knobs, and other custom details. Likewise, a historic property in a declining neighborhood may not be valued highly by current buyers, but that doesn’t change the cost of restoration. You and your insurer must speak the same language to ensure your reimbursement matches the actual cost of repair.
4) Seek support
Historic properties often come with extra regulations for the owner, but they may also place extra restrictions on the insurer. Some states legally prevent an insurer from basing reimbursement on market value. Nonetheless, insurance companies sometimes make mistakes.
5) Plan for extra time
Working with your insurer to get fair reimbursement takes longer with a historic property. You also need time to locate special building materials and to find—and schedule—a contractor experienced with your type of property. Know the period of time your insurer allows for completing repairs and request an extension if you think it will be needed, providing a clear explanation why more time is needed. If the insurer says no, the state’s Department of Insurance may be able to help.
How we help you
Owners of historic properties need a clear understanding of what their policy covers so they don’t face unpleasant surprises when disaster strikes. Grenier Public Adjusters works with Massachusetts property owners to review their insurance coverage before a problem occurs, and I negotiate claims with insurers on behalf of property owners to get a fair reimbursement. Your insurance company’s adjuster works for them; as a public adjuster, I work for you.
It would be my pleasure to have a no-obligation meeting with you to discuss our services. Please contact Grenier Public Adjusters or call 774-239-6822 anytime.