Given the state of the real estate market today, finding a new home can be a challenge. Because the demand for homes is greater than the supply of houses on the market, many buyers find it difficult to secure a contract. As a result, some buyers turn to older homes with fixer-upper potential. While some buyers are getting older properties out of necessity, many others prefer older homes’ unique character and charm. Older homes are usually found in great areas, have larger rooms, and come with lower price tags. Whether you are buying out of necessity or preference, purchasing an older home can be a significant investment.
If buyers are seeking out older properties to invest in antique homes, they typically want a place that is 50 years old or older. Homes considered antique date back to the 1920s or before. To qualify as a historic home, the property must meet strict age and significance requirements. Many of these historic homes are also popular with vintage buyers. Whether the home was built in the 1920s, 1970s, or 2000s, however, there will be requirements for insurance.
The majority of mortgage lenders require that buyers have homeowners insurance as a financing condition. As with most things, however, age can take its toll on older homes, and this can be seen as a greater risk to some insurance companies. In some instances, an insurer may even require repairs or replacements around the home before a policy is issued. If you are looking for the best homeowners insurance for older homes, there will be a few things to consider. Let’s take a look at securing insurance for your older property.
What policies cover older homes?
Depending on your needs, you can opt for a basic home insurance policy that offers the same coverages as if you were insuring a new construction house. When you consider the age of your home and the unique costs in maintaining and repairing some of these older properties, it might be best to consider other types of policies. A high-value homeowners insurance policy is a type of coverage that protects homes with an above-average value. Many antique and historic homes can be valued very high, and typically a high-value policy covers properties that are worth $750,000 or more. Given the large expense of repairing or replacing these homes, you might consider a policy targeted toward higher-value homes.
A standard HO-3 policy is the common type of home insurance and protects against loss and damages by covered events. Homes over 40 years old might need an HO-8 policy if the home’s replacement value is greater than the current market value. This is a modified HO-3 policy and is commonly used to ensure older homes, registered landmarks, and other architecturally unique properties. These policies can end up being cheaper than a conventional policy for an older home.
Is insurance more expensive for an older home?
In general, older homes are more expensive to insure. Depending on the house, replacement costs can be higher due to special materials and craftmanship. As an example, many old houses have plaster ceilings and walls, ornate trim, and non-standard windows and doors. These items are very expensive to replace and require the skills of a specialist. Older homes also pose more risk than newly constructed ones because wiring, plumbing, and other materials are less resistant to damage, fire, or other hazards. Insurers tend to charge more to cover older houses to offset these risks.
If you have purchased an older house, historic home, or antique property, finding insurance could prove to be tricky and more expensive. With special policies and higher risks, it will be beneficial to shop around for different plans, coverage options, and rates. You can find the best coverage for your older property with some time and considerations.