Folks who love older houses often say those homes have a charm that just can't be duplicated.
That's a virtue, but it's also a problem: Features that make old homes charming are things that are difficult and expensive to replace, making them difficult to insure properly.
"It's important to let your insurance company know that you have an older home with unusual or distinctive craftswork or building techniques," said Jayna Neagle, spokesperson for the national Insurance Information Institute. "Most companies aren't going to replace it to its original state."
She said policies specifically designed for such matters are offered by certain "boutique" insurance companies, but "your average homeowner probably will not be able to get a policy that will replace it to the exact state it was in before the damage occurred...You'd have to do some shopping around and ask questions and be a savvy consumer."
Opinions vary on how much shopping is needed and on how much restoration will be done after a loss. The key question is whether the policy will pay to restore the home, replacing features exactly, or whether the replacement will be of "like kind and quality." The latter is a common insurance term that Mark Kulda of the Insurance Federation of Minnesota said typically "recognizes that there is a balance between trying to match exactly what was in the home with what currently is available in the marketplace."
In other words, unless specified in the policy, "like" doesn't automatically mean "identical."
Often, "you can't find an identical piece for what was lost," Kulda said. "If that 's the case, then insurers will replace it with something of like kind and quality." As Neagle said, a few insurers will do a full and painstaking replacement--but such coverage may require paying a higher price.
The Chubb Group of Insurance Companies is one such insurer, and Mary Ann Avnet, marketing and sales manager for the personal lines division, said Chubb's theory is offering homeowners a choice.
"The customer at the time of a loss should be able to choose between exactly the same as what they had before, something less expensive, or taking the cash settlement and not replace (the loss) at all," Avnet said. "The fact is that the customer actually is losing something more valuable than mass-produced molding," which she cited as an example. "We want to make sure that if they do want it, they can get it," even if that means searching for "the specific artisan that still exists that can do that kind of work."
Stephanie Gruver, manager of personal insurance services at Rosenbloom & Rosenbloom, an independent insurance agency in Bloomington, Minn., said she suspects that most home owners aren't aware that their "replacement cost" insurance may have limits in the extent to which it will duplicate what was lost.
She said people tend to buy "because they love the look and character of an old house, and they don't realize the cost to replace or reproduce these materials until there is a loss," Gruver said. "People sometimes will start to think about this if they do remodeling...and they'll realize that trying to match new to old is more expensive than matching new to new."
So what's new and what's old?
"Homes built before 1945 are generally considered 'old homes,' " Gruver said. "The materials and craftsmanship involved in their construction are not as commonly found in later homes." Gruver, a certified insurance counselor, often works with owners of such homes, which she said typically can't be insured for replication simply by applying today's building costs to the number of square feet.
What's distinctive?
"Woods in these homes were from older forests, making longer and wider boards available, and the grain itself is usually denser," Gruver said. Walls and ceilings were lathe and plaster, and "there were more craftsmen available, so it is not unusual to see cove ceilings, unique woodwork, built-in cabinets, fancy plaster walls and archways and custom wood doors and fireplace mantels."
While not perfect, 1945 is a handy marker for big changes in popular home construction. In the postwar boom, drywall overtook plaster and full-dimension lumber yielded to smaller sizes called by the old names: the common "2 x 4" lost a quarter-inch in both dimensions. Later, it was reduced an additional 1/4" to 1-1/2" by 3-1/2".
Other changes shoved some common pre-war materials and techniques into the "custom" category, according to a CNA Personal Insurance document called "The Reality of Reconstruction." Such so-called custom features include: hardwood flooring or decking; unique door and window sizes (replacements may be unavailable in suppliers' stocks ); built-in plaster niches and hardwood cabinets and bookcases; solid brass door hardware and plumbing and lighting fixtures; hardwood trim and moldings; decorative exterior woodwork, and masonry fireplaces.
Even seemingly simple things may be complicated.
"If you have a high ceiling...there may be some unusual lengths of wood," Gruver said. "The woodwork can be very difficult to duplicate or replace," especially if it has hand-carved details. Her colleague Bonnie Noll added another example: A staircase the owner takes for granted might be difficult to replace if its dimensions differ from today's standards. The handrail and spindles also may be expensive. Even replacing flooring and trim may be difficult, she said, because "generally speaking, the older the home, the wider the boards."
Other details are more complex--and costly.
"Some of the light fixtures, for example, have unusual glass globes, so if you have a five-globe light fixture and two are damaged, it can be difficult to find a match," Gruver said. If a match can be found, the cost can be steep.
For example, Gruver said, friends have a home they bought from its original owner 's family, "so the place was fairly intact from its original construction date of 1925. The house has exceptionally beautiful Art Deco light fixtures, including a five-shade dining room light and four matching wall sconces." Gruver said her own house, from about the same time, was missing its original dining room fixture, and she went shopping for a replacement.
"I priced fixtures like my friends have at $600 for the dining room light and as much as $300 for each sconce; that's $1,800 worth of light fixtures in two rooms of a house that only sold for $70,000. The lighting in most average new homes in the $125,000-to-$150,000 range probably doesn't run more than $1,500 for the entire house."
A number of turn-of-the-century homes sold for mid-range prices also may have unusual or unique plumbing fixtures or bathroom tile, she said.
The insurance policy widely considered "standard" is the HO-3, which covers the home for all risks subject to exclusions and limitations, she said. Owners can add coverage for replacement cost or variations for even more, sometimes called extended or guaranteed replacement cost. But even those may have limits--and a home with distinctive details needs special attention.
"With an older house, a broader policy is going to be more generous in how the insurer handles losses," Gruver said. "Basically, some of the policies designed to handle these older homes and historic homes set a goal of replacing things that are unique to an older house...You want to be careful so you actually get something that truly is like what you had vs. something that is going to function like what you had."
For example, she said, with some companies, "replacement might be interpreted as replacing a door with a new door." But many houses from before World War I have multi -panel solid oak doors, and owners may not be happy with "functional replacement" with a single-panel oak door. They'd be even less likely to be satisfied with attempted replacement by a flat, hollow-core door, which she said could be considered a functional replacement. Instead, she said, you want to get a policy that will replace damaged elements with those of "like kind and quality."
(Distributed by Scripps Howard News Service.)
