Homeowners insurance for older homes
Last updated: January 1
If you're in the market for a new house, "character" might be on your list of preferred features. That may mean you end up falling in love with an older home. Here are a few factors to consider when buying an older home and how they may affect your insurance premiums.
Factors that may affect rates for older homes
Several things could lead your insurance company to charge higher home insurance rates for an older home.
Outdated electrical wiring
Building standards have changed over the years, and some older homes have features that don't meet modern building codes. According to the Electrical Safety Foundation International (ESFI), some homes may have a 60-amp electrical system rather than the 100- or 200-amp service common today. Other older homes may feature knob-and-tube wiring, which is more exposed than today's style.
These factors increase fire risk which could lead to higher home insurance rates or even denial of coverage. Knob-and-tube wiring is considered so risky that many insurance companies won't cover a home with this type of wiring.
Galvanized steel pipes are common in older homes. These plumbing systems tend to rust which can inhibit water flow and lead to water damage. Most insurers will take this into consideration when calculating your rate.
It's important to know what kind of roofing material your older home has. Old materials could put your home at extra risk for wind, hail or other damage. It could also be more expensive to repair or replace older roofs, a factor your insurance company will consider.
Rare materials (replacement cost)
Reclaimed wood, antique doors and hand-painted windows can be difficult to replace. If older homes are seriously damaged, their hard-to-find materials and architectural flairs can make reconstruction a costly challenge. You'll want to ensure you have adequate replacement cost coverage to help cover the expenses.
Coverage options for older homes
If you need help mitigating the risks of owning an older home, here are a few coverages that could be useful to have on your insurance policy.
Increased dwelling protection
Adequate dwelling coverage is recommended to cover the cost of rebuilding your home should it be destroyed by a fire, storm or other risk. Take stock of rare or expensive architectural elements in your home, and factor them in when deciding how much it will take to restore it.
Remember, the cost to repair or rebuild your home may not be the same as the price you paid for your home. Keep this in mind when choosing your dwelling coverage limits.
Water backup coverage
If your home has an older sump pump, sump pump failure could be a potential issue. If you have a finished basement, you may want to consider water backup coverage. This is an optional protection that helps pay to repair damage from a backed-up drain or sump pump.
Replacement cost based on today's building codes
If your older home is destroyed, your dwelling protection coverage can help you rebuild, but it could cost extra to bring your home up to today's safety regulations. Building code coverage helps pay for additional costs if the damaged parts of your home need to be repaired to meet modern building codes.
Compare insurance quotes for an older home
As you shop around for a homeowners policy on an older home, it can help to compare insurance quotes from several companies. Make sure you're comparing the same sets of coverages, limits and deductibles for each quote you get. That way, you can make sure you're doing an accurate comparison and choose the policy that's right for you.
If you have questions about coverage options for an older home, talk to your insurance provider. They can answer questions and help you choose the coverage that works best for your situation.