Heritage Property Fire Insurance and Prevention

It is probably fair to say that more designated heritage buildings are destroyed by fire than by any wrecker’s ball. Yet, prevention and particularly carrying the correct and adequate amount of fire insurance seems to remain a mystery to many people.

The problem is that insuring a heritage property is like trying to fit a square peg into a round hole. The round hole being the thousands upon thousands of newer homes insured every year without difficulty. This is because estimating the replacement cost of a newer home is a relatively simple, routine matter, and it normally goes without saying that all the components of the structure meet or exceed current building code and safety standards. But, nothing could be further from the truth when dealing with heritage buildings; they just do not fit into that well rounded hole.

Almost every designated heritage building is unique. It is a one of a kind and has been around for some time. Current building methods, materials, and components have changed. Many of the old trades have disappeared and some building component are just not available today. So, in the event of a fire or damage from another source, it is nearly impossible to replicate the items destroyed, unless done by highly skilled craftsmen.

Yet, insurance providers aim to replace a home in “like kind and quality” but as the Insurance Bureau of Canada points out in their recent pamphlet on the subject, “Some insurers may not offer guaranteed replacement cost coverage for a heritage property even as a policy add-on.” This is corroborated by an Ontario Government publication, Insurance and Heritage Properties, which asks the question, “What if I want the original features of my property to be replaced in case of damage?” To which they answer, “If this is what you want, make sure you’re properly covered. Insurance coverage for this depends on the degree of risk you and your insurance company are prepared to share. The age, quality and condition of your building will effect what coverage is available and the premium charged.”

For these reasons, insuring a heritage property sets it apart from insuring the average home. It may come as a surprise to some that the Ontario Heritage Act does not require a designated building that has been accidentally damaged by fire or other causes to be restored or rebuilt in its former style and fashion. However, many owners of designated properties seem to go to “no end” to restore the cherished features of their building. For those who share this view, having adequate and proper insurance coverage is of the utmost importance.

Unfortunately, a fire can totally destroy a heritage building, and it is gone forever. On rare occasions, heritage buildings have been reconstructed, but this is mostly confined to buildings of special cultural value and heritage importance. It is only when there is a total loss that the Ontario Building Code requires a building to be reconstructed in accordance with current standards. In effect, this means that any partially damaged building can be restored using the same materials and construction methods as used in the original building.

Any consideration of fire insurance must go beyond just insurance issues and involve a wide range of risk management concerns that encourage preservation of built heritage properties.

While carrying adequate insurance is important, prevention can reduce the possibility of having a fire or other damage. Risks can be greatly reduced by updating building components, avoiding hazardous materials, and installing an early warning alarm system. These simple steps would go a long way in avoiding a fire or other damage.

When applying for heritage insurance, owners would be well advised to try and make that square peg a little rounder by providing all relevant information about the building and designation, including level of maintenance and repairs, age, fire protection measures, and an insurance valuation by a qualified appraiser. Owners might consider “shopping around” and possibly engage the services of an insurance broker. These steps, in addition to taking some of the mystery out of insurance, might also qualify the owner for lower premiums.

Information on insuring a heritage property published by the Ministry of Tourism, Culture and Sport is available at http://www.mtc.gov.on.ca/en/heritage/tools.shtml. A brochure on heritage properties by Insurance Bureau of Canada is available at http://www.ibc.ca/en/home insurance/documents/brochures/her­ itageproperties_brochure_en.pdf

Robert B. Hufley is a built heritage historian, author, and photographer.

Originally published by CHO News, January 2013