Things to Consider for Insurance When Purchasing a Heritage Home

Buying a heritage home

Buying a home is an exciting step in your life. If you’ve always dreamed of owning a heritage home, you can run into different challenges than when shopping for a newer home.

While older homes come with charm and character, they might have issues below the surface that are difficult to spot. An inspection is requisite when buying a heritage home, yet there are many other things to consider, including how your home’s age might impact your home insurance.

Here are the insurance issues you should consider when hunting for your dream heritage home.

Electrical System

Unsurprisingly, older homes tend to have outdated electrical systems. Even if it appears there have been upgrades to the home, what lies below those new walls could be deceiving.

One of the main challenges of older electrical systems is they were not designed to handle all the electrical components, appliances, and devices you use today. Therefore if you have a home with knob-and-tube wiring, aluminum wiring, or a 60-amp electrical system, you could be at higher risk for an electrical fire.

Avoid falling in love with a potential fire trap and make it clear to your real estate agent you are only interested in seeing homes with recent electrical upgrades with at least 100 amps.

Sump Pump and Backwater Valves

Newer homes include features that help avoid flooding and sewer backups. Make sure your home has a sump pump and backwater valve to help keep water flowing properly. This will help pump out excess water that might drain into your basement.

Outdated or Illegal Materials

Over time, the dangers of some building and décor materials have come to light. Things like asbestos or even lead paint can still be present in heritage homes. However, these materials are banned today as they pose health hazards.

Home inspectors can look for these issues, although lead paint can be tough to identify. Include detecting asbestos and lead during your inspection before putting in an offer. Both these materials come with a hefty price tag for safe removal and replacement, so unless it’s in your budget, avoid homes with these challenges.

Poor Foundation

Older homes, especially heritage homes, have been standing for a century or longer. This naturally leads to the deterioration of key components, including the foundation. Foundation issues pose a threat not only to the structural soundness of the home but also for potential leaks that can cause costly damage.

You might also run into issues with rot in the wood as well as mould caused by decades of dampness. Rotten sill plates are common, as sill plates are located at the base of the home, and in the past were made of wood. This can lead to other issues beyond water damage, including pests being able to enter your home more easily.

An Old Roof

Of course, the roof will be inspected during your home inspection. However, there are other issues with older homes to consider when it comes to the roof, including:

  • Moss
  • Damaged eavestroughs
  • Missing shingles
  • Leaky attics
  • Water damage to walls and ceilings
  • Sagging due to moisture

Heritage Designation

Homes with an official heritage designation can limit what you can do with the home. If you have your heart set on major customized upgrades, this is not always possible with heritage homes. It can also be a hassle to make even simple, necessary renovations and upgrades as you must go through the city for approval. This can take months and become very costly.

Insurance Costs

Your home insurance will be higher because older homes are at higher risk of damage. At Bow Valley Insurance, we can help you with insurance for heritage homes. Homes over 30 years old require upgrades to the plumbing, electrical and heating systems by insurance companies. Other issues include:

  • Roofs over 25 years old
  • Galvanized plumbing for homes built prior to 1950
  • Furnaces and heating systems over 25 years old
  • Oil tanks over 25 years old
  • Sewer lines and septic tanks
  • Electrical service installed before 1980 or 60-amp service
  • Knob and tube wiring
  • Wood burning stoves

Mortgages for Older Homes

Because you need proof of home insurance when applying for a mortgage, the risks associated with being turned down for home insurance can prove challenging.

It’s particularly important to consider your budget and whether you can afford associated upgrades required by insurance companies when buying a heritage home. Without the budget, or the finances to include the renovations in your mortgage, you will face issues in qualifying for a mortgage without insurance.

High Risk for Older Homes

The older the home and the more potential risks associated with the house, the more chance there is you will need high-risk insurance for your heritage home. This is even more likely, for example, if your home is in a rural location and also a century home, as this ups the risk should there be a fire.

Heritage Designation and Insurance

Insurance premiums do not automatically rise if your home has a heritage designation by the government. Instead, as mentioned above, other reasons associated with older homes will be the main reason you will see higher insurance premiums. To help manage your premiums more effectively, you can consider the following:

  1. Shop around
    Look for an insurance company that can help you find the best century home insurance policies.
  2. Make changes
    Review all the recommended upgrades to reduce your risks and provide you with the proof for your insurance company that the work has been completed.
  3. Maintain upgrade records
    Every upgrade made, including roof repairs, maintenance of your HVAC system, foundation checks, etc. should be kept as proof you are practicing proper maintenance that could be questioned if you file a claim.
  4. Get complete coverage
    Because your home is older, you want to have the proper coverage as you are at a higher risk of damages.

Although this information can seem a little overwhelming, it should never discourage you from owning your dream heritage home. With the proper coverage and considerations for your renovation budget and choosing your home wisely, you will be able to live worry-free even in your heritage home.

If you would like more information about insuring a heritage home, call Bow Valley Insurance at 403-297-9400 or contact us here.

Disclaimer: Coverage is subject to policy wording, terms, conditions, and deductibles. Protection is limited to the perils, coverage, exclusions, and limits shown on the policy.