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Homeowners' Insurance Options For Older Homes

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Standard homeowners' coverage, which the insurance industry refers to as an HO-3 policy, might be inadequate for your old home. The inadequacy risk is especially high if the home still has most of its original materials. Thus, you should consider alternatives to the HO-3 policy or supplement the policy with add-ons. Below are some of the options available to you.

HO-8 Policy

An HO-8 policy targets properties whose replacement values exceed their market values, as is the usual case with older homes. The policy pays you the home's actual value, which means the policy factors depreciation. You may consider an HO- 8 policy if you have struggled to buy other forms of home insurance.

High Values Insurance

Some insurance companies provide high-value homeowners insurance for homes with above-average values. The companies usually specify the minimum values that qualify for high values insurance coverage. High values insurance policies come with above-average policy limits, which can help you rebuild an older home with expensive materials and designs.

Guaranteed Replacement Cost

Most forms of insurance coverage have strict compensation limits. With such a policy, you have to use your funds if your home suffers damage and its rebuilding cost exceeds the coverage limit. Guaranteed replacement cost coverage extends your usual coverage limit. With the extension in place, the insurance company will rebuild your home even if the cost exceeds the standard limit.

Water Backup and Service Line Coverage

Older homes typically have worn materials or systems with high risks of malfunctions. For example:

  • An aging water supply system can burst, damage your home, and leave you without a water supply.
  • A deteriorated electrical system can trigger an electrical fire in your home.
  • A worn drainage system can spill dangerous effluent into your home.

You are responsible for service malfunctions on your lot, and their repair costs can be high. Some insurance companies offer coverage for such issues; consider such coverage if you have an old home with its original utility systems.

Roof Replacement Coverage

For many homes, the roof is one of the most expensive parts to replace. Roof replacement costs can be particularly prohibitive if the structural support requires fixing or the roof has unique materials. In fact, many home insurance companies are wary of older homes due to the properties' roof issues; some companies even limit roof coverage.

Consider roof replacement coverage as an add-on to your older home insurance. The add-on ensures that the insurance company treats the roof like any other part of the home and replaces it in case of damage.

For more information about homeowners' insurance, contact a local provider.