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The Benefits of Guaranteed Replacement Cost Coverage for Historic Properties

The Benefits of Guaranteed Replacement Cost Coverage for Historic Properties

Though many historic property owners want to keep their property in pristine condition, this is obviously easier said than done. Historic property owners need to make sure that they are covered in the event that their building is destroyed in a catastrophe, and not all forms of coverage can fully cover these damages.

There are so many scenarios that could happen, and every property owner’s ideal scenario includes their replacement costs being entirely covered. Not every insurance policy or type of coverage can do this, but a policy with guaranteed replacement cost coverage can take on these costs. Not familiar with this coverage? Here’s a quick look at what it is and why it’s important.

What is Guaranteed Replacement Cost?

Guaranteed replacement cost is a property insurance valuation option one can get in some insurance policies, according to the International Risk Management Institute (IRMI). It guarantees that the full cost of the property will be covered during a rebuild or restore, no matter how much it costs, with no limit to the coverage. That’s why this type of coverage is highly sought after and it’s hard to find. It fully compensates the insured with no depreciation and without a maximum reconstruction payment. It’s that little extra bit you need to keep you covered when your other policy maxes out.

Our programs offers a Guaranteed Replacement cost coverage option.  This means that we will pay the “historic replacement cost” less the deductible if the amount of covered loss or damage is determined to be in excess of the Limit of Insurance shown on the Declarations for real property at a premises.

Why Do You Need It?

Without this type of coverage, you can’t guarantee that your property will be fully covered in the event that it needs rebuilding or restoring. This coverage is particularly important for historic property owners because historic properties have unique needs that standard residential and commercial properties don’t have. From unique architecture to vintage materials, it’s not as easy to rebuild a historic property, and can easily get costly. Without sufficient insurance coverage, that cost is going to come to you.

Read the Fine Print

When purchasing historic property insurance, it’s important to think of why you would need it. If there’s a natural disaster that you can’t get away from that damages your historic property, you need to make sure that your repairs and rebuild are covered. Standard policies will repair and rebuild with standard materials.  If you’re restoring your property, you also need the additional coverage that is needed for specific construction and craftsmanship. Study your policy carefully so you know exactly how much coverage you have. It’s better to find out that your coverage is insufficient before a major loss (so you can obtain more) than after.