There's something magical about owning an older home. The hardwood floors, the crown molding, the craftsmanship you just don't see in modern construction. But here's what nobody tells you until you're sitting across from an insurance agent: insuring that 1920s bungalow or Victorian beauty is a whole different ballgame than insuring a house built in the last twenty years.
If your home was built before 1950, you're likely facing higher premiums, more inspections, and possibly some required upgrades before an insurer will even cover you. The average cost to insure a 100-year-old home is $1,956 per year—nearly $850 more expensive than the average cost for a new home. Some owners find themselves paying 50-100% more if they keep outdated systems like knob-and-tube wiring.
But don't panic. Plenty of people successfully insure older homes every day. You just need to understand what insurers are looking for and how to navigate the quirks of vintage construction.
Why Older Homes Are Harder (and More Expensive) to Insure
Insurance companies look at risk. And from their perspective, older homes come with a lot of it. The materials that were standard in 1930—plaster walls, knob-and-tube wiring, galvanized steel pipes—weren't designed to last forever. Many are now fire hazards, prone to leaks, or simply incompatible with modern safety codes.
Take electrical systems. Knob-and-tube wiring was state-of-the-art from the 1880s through the 1930s. Today, it's a nightmare. It's difficult to maintain, prone to causing electrical fires, and many insurers flat-out refuse to cover homes that still have it. According to the U.S. Consumer Product Safety Commission, homes with aluminum wiring (another common older-home issue) are 55 times more likely to have fire hazards.
Plumbing isn't much better. Homes built before the 1960s often have galvanized steel or even lead pipes. These corrode over time, leading to leaks and water damage. In fact, water damage and freezing made up between 18% and 23.5% of all home insurance claims between 2017 and 2021, with an average loss of $12,514 per claim. When your pipes are already sixty years past their prime, that risk skyrockets.
Then there's the cost to rebuild. Older homes often feature custom architectural details—stuccoing, ornate trim, plaster walls—that are expensive and hard to replicate. If your home is damaged, repairs aren't just more expensive; they might require specialized contractors who know how to work with vintage materials. Renovations on historic homes generally cost 5.6% more than similar-sized newer homes.
What Insurers Will Ask You to Do
Before most insurers will cover a pre-1950 home, they're going to want an inspection. They need to know what they're dealing with. Are the pipes copper or galvanized? Has the electrical panel been updated? What's the condition of the roof?
In many cases, you'll need to make updates before you can get coverage. Common requirements include replacing knob-and-tube wiring with modern electrical systems (expect to pay $5,000 to $10,000 or more depending on your home's size), updating galvanized or lead pipes to copper or PEX, replacing old roofs that show structural damage, and upgrading outdated HVAC systems.
Yes, these upgrades are expensive. But they're also worthwhile. Beyond satisfying your insurer, you're making your home safer and more livable. Modern electrical systems reduce fire risk. New plumbing prevents leaks and water damage. A solid roof protects everything underneath it. These aren't just insurance hoops to jump through—they're smart investments in your home's longevity.
Understanding Functional Replacement Cost Coverage
Here's where things get interesting. If you own a truly historic or unique older home, you might encounter something called functional replacement cost coverage. This is different from standard replacement cost coverage, and it's worth understanding the distinction.
Standard replacement cost coverage pays to rebuild your home exactly as it was—same materials, same details. But for older homes, especially those built before 1940, that can be prohibitively expensive or even impossible. Where do you find a craftsman who still does lath-and-plaster walls? How much would it cost to source slate tiles identical to your 1920s roof?
Functional replacement cost coverage solves this by paying to restore your home using modern materials that serve the same function. If your lath-and-plaster walls are damaged, the insurer pays for drywall. If your slate roof is destroyed in a storm, they cover modern asphalt shingles. The result looks similar and performs the same job, but it's not an exact historical match.
The upside? Lower premiums. Because the insurer's exposure is limited to practical, modern materials, they charge less. The downside? You lose some of that original charm and character. For many homeowners, especially those in designated historic properties, that's a tough pill to swallow. But here's the reality: for homes built before 1986, and especially those built before 1940, functional replacement cost coverage may be your only option. Many carriers won't offer anything else.
Finding the Right Insurance for Your Older Home
Not all insurers are created equal when it comes to older homes. Some specialize in them. Others avoid them entirely. Your best bet is to work with an independent insurance agent who has experience with vintage properties. They'll know which carriers are more flexible, which ones require fewer updates, and how to present your home in the best possible light.
When shopping for coverage, be prepared to provide documentation. Photos of recent updates, receipts for electrical or plumbing work, and inspection reports all help. If you've already replaced the wiring or updated the roof, make sure your insurer knows. These upgrades can significantly lower your premiums.
Also, don't assume the first quote you get is the best you'll find. Rates for older homes vary widely between insurers. One might quote you $3,000 a year while another comes in at $1,800 for the same coverage. Shop around. Get at least three quotes. And remember, the cheapest option isn't always the best—make sure you're comparing similar coverage limits and deductibles.
How to Get Started
If you're buying an older home, get the insurance question sorted early—ideally before you close. You don't want to discover after the fact that no one will insure your dream house without $20,000 in electrical upgrades. A pre-purchase inspection that specifically looks at electrical, plumbing, and structural systems can save you from nasty surprises.
If you already own an older home and you're looking to switch insurers or get better rates, start by documenting any updates you've made. Then reach out to an independent agent who works with multiple carriers. Be honest about your home's age and condition—trying to hide issues will only backfire during the inspection.
Yes, insuring an older home takes more work. You'll pay more, jump through more hoops, and possibly need to make some upgrades. But those homes—with their character, their history, their solid craftsmanship—are worth it. And with the right coverage in place, you can enjoy your vintage beauty without lying awake at night worrying about what happens if something goes wrong.
