Reducing Your Risk Exposure on Historic Properties

Historic properties stand as an important reminder of, and glimpse into, bygone days. But maintaining these structures may present some challenges that leave you longing for a user-friendly time machine to hire some talented craftsmen from the past. Federal rules, like the Standards for the Treatment of Historic Properties, mean you can’t simply tear down, replace, or modify a historic property with just any ordinary materials. These guidelines address how to preserve, rehabilitate, restore, and reconstruct all aspects of historic buildings. Yes, when you own historic properties, it’s a constant cycle to stem the physical depreciation.

But it’s not just about the labor and maintenance. It’s also important to make sure you have the proper insurable values for it all. Today we’ll talk about what goes into values for a historic property and how to ensure you have all the information that helps you mitigate risk and maintain thorough insurance coverage.

What constitutes a historic property?

A historic property is one that has been included in the National Register of Historic Places, the official list of America’s important and preserved historical spots. To be included, your property must meet various criteria and — unsurprisingly — you’ll have to complete a certain amount of paperwork. In general, however, historical buildings must be at least 50 years old and be associated with events that either contributed directly to history or are connected to the lives of important historical figures.

With historic properties, the difference is in the data details

With every historic structure, a lot of expert knowledge and data-gathering goes into every property value. (Or at least, it should!) As your organization works to address each historic building in your property portfolio, you’ve probably found yourself confronted by a lot of critical valuation questions. Like: which building features and materials are ones that diverge from current standards? How were they constructed? When do you use replacement costs versus reproduction costs for your valuation estimate? (Check out our blog post on that here.) How does rebuilding as “like kind and quality” affect the property’s value? How do today’s building safety codes and accessible design requirements for people with disabilities affect the structure and its values?

These and other details can shift a building’s appraisal value which, in turn, can affect the amount of insurance coverage required. If you fail to account for these and other key historic details on your insurance Statement of Values (SOV) before a risk event occurs, your historic property might just end up underinsured. And no one wants to be left waiting to restore or reconstruct some unique historic feature, only to learn their insurance won’t fully cover it!

Hire a modern property firm with historic expertise

To ensure you limit your risk exposure on that Colonial courthouse or Victorian venue, it becomes important to choose a property valuation firm with expertise in historic properties. Don’t try to go this alone! Just like you’d choose a stonemason, muralist or stained glass artist to reproduce and restore key architectural details on your historic building, it’s important to choose an independent appraiser specializing in historic structures. A skilled historic valuation expert knows what to look for and how to document it all, to make sure you receive the most comprehensive property valuation for your SOV.

An adept historic appraiser knows the value is in the details, and that means breaking the building down into components. Here, your valuation expert should spend time identifying highly-specialized construction materials, documenting their potential availability, taking meticulous measurements and, likely also, snapping more photos than they might for a modern property. A savvy historic property appraiser will understand how an event like flooding or fire could affect a structure from a bygone era, and what would need to be reconstructed to properly replicate the time-period and its materials.

A history of accuracy with the right property valuation partner

A trusted property valuation firm with experience in structures from the past can help win your organization’s historic battle for accurate valuations and complete coverage.

If you have historic properties in your Statement of Values, the valuation experts at Centurisk are ready to help. Our decades of experience with older buildings and unique structures have helped organizations take control of their risk and ensure better insurance coverage.

Want to learn more about Centurisk’s valuation services for historic property? Simply fill out the form below and a member of our team will be in touch!

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