Protecting your investment in history
Greater Cincinnati has a rich architectural history. Our neighborhoods are blessed with examples of historic buildings and structures. We want to maintain and preserve these buildings and part of that preservation effort is properly insuring the buildings. Owning a historic building requires a different approach to the insurance process. Even if you are not in a historic district, you may have a property with unique features and architecture and you want to properly insure those features of your building..
The features of a building that make it unique and historical can range from the structure of the rooflines, paint schemes, type of trim and decorative features, to materials used in the building construction. The replacement of these features after a loss can be a difficult process. If your insurance program is not designed around these issues, it can lead to a disappointing outcome.
The first step in setting up an insurance program for a historic building is understanding the values that are at risk. For properties that have a specific historic designation, there may be restrictions and requirements around the exterior appearance of the building. This can limit changes in materials and changes in appearances. These limitations will add significant expense to a repair or replacement project.
We discussed the insurance to value process in a prior article. This process uses constructions costs from current projects to project an average cost for the similar amount of construction in your building. These values are developed using modern materials and techniques. They are generally inadequate at estimating the replacement or reconstruction costs of historic buildings and finishes. Using a historic valuation service is often the best resource to establish a sound baseline replacement cost for your property. Your local historical society may be able to help you find a qualified appraiser.
Standard insurance policies and the related claim adjustment process may not be prepared to deal with the nuances of a historic preservation claim. This is outside the norm for a typical property claim and trying to teach a claims adjuster the detail around your property is not something to do in the middle of claim.
There are specialty insurance programs and specialty insurance endorsements and forms that can be used to place the coverage into the right context. The use of these forms and endorsements also clearly signal to the insurance carrier that a more focused claims adjustment process is required.
Some properties may qualify for a historic tax credit. These tax credits may have time constraints related to the completion of the project. There are insurance forms that can protect you from the loss of this tax credit due to a covered loss.
You will not get these forms and terms of coverages from an online system or an only pay for what you need phone call. These coverages are outside the realm of mass marketing and need an insurance professional to help you place your coverage.
Getting the process started requires knowledge on the part of the property owner. You need to know what historic district or building regulations apply to your property. The existence of these restrictions may be the first indicator that you need a different insurance program.
What are the architectural features of your building that are important to you? This can be the look of old-style wavy glass in windows, to the carved wooden details on the façade. If you have not taken stock of these features, it is doubtful that you will point them out to your insurance agent or an appraiser. The time to find out that you must use a specific brick or stone on your façade is not after a claim has occurred. Some simple inquiries to the local building department or historical district are the first step to getting the right insurance program for you.
Once you have identified features that are important to replicate, take photos with a scale in the photo to allow proper measurements. Consider having an architect or engineering firm make a survey of your property to document the conditions, materials, and profiles. Having this level of detail will protect your investment by allowing accurate repairs or reproductions. You need to create an inventory of building features that support the valuation and have available in the event of a claim.
The Driehaus Difference
Our agency has background knowledge of urban planning, zoning, and development processes. Dan Driehaus has served on local planning commissions and is in touch with the needs of building owners for redeveloping our communities. Our offices are in the historic Cincinnati Club building at Piatt Park. We can help you understand the information you need to gather, the valuation process and the coverage required to protect your interests. Call us at 513-977-6860 or reach out on the internet at www.driehausins.com