Across Ontario, there are many historic buildings, structures, districts, and archaeological sites. You may be considering one because of its old-world charm and historical legacy. While the heritage value of owning one of these structures is obvious, the practical value is a little less clear. Buying older houses in good locations has become popular among those who intend to renovate and enjoy both the home’s character and modern amenities. Regardless of the structure type – old Victorian, mid-century ranch, or colonial – you will need to fully understand the costs of maintaining and insuring an older home. In this article, we will clarify what qualifies as a heritage property, outline the pros and cons of this type of investment, and help you understand the relationship between heritage homes and home insurance.
What is a Heritage Home?
Heritage properties can include built resources such as historic houses, bridges, heritage conservation districts, and cultural heritage landscapes. Heritage also includes archaeological resources. The Ontario Heritage Act defines how a heritage home is identified, designated, protected and conserved. It also gives municipal councils the power to designate individual heritage properties and heritage conservation districts. This designation prohibits the demolition or removal of any building or structure and requires ministerial approval for alterations of the property.
The Ontario Heritage Act enables municipalities to designate properties of cultural heritage value or interest through a by-law.
Designation is a way for:
- Owners to express pride in the heritage value of their property
- The community is to protect and promote awareness of its local history
Designation can apply to:
- Individual properties
- A whole neighbourhood or district
If a property or district is designated, it gains public recognition and protection from demolition or unsympathetic alteration, allowing its heritage attributes to be preserved.
What Determines Heritage Status in a Home?
Owning a heritage property is an investment in Canadian history. There are many factors that determine whether a property is considered ‘historic’ or not, including:
- Age of the home
- Architectural design and builder
- Historical significance
- Exterior condition
- The manner in which it was constructed
- Contribution to its landscape or streetscape
- Cultural value
- Occupants / previous owners
What are the Pros of Owning a Heritage Home?
If you are a fan of HGTV, you are aware that owning a historic home often comes with its own set of benefits and challenges. Here’s a quick look at the pros of buying a historic home:
- Character and charm: From the ornate fireplaces to the intricate crown moulding, there are so many fun details to love about an older home.
- Stories to tell: In addition to the charming characteristics, a historic home houses its own interesting history.
- Preserving history: Purchasing a historic home helps keep history alive. Over time, it will require repairs and updates. Also, by adding on or renovating, you can make the home your own while preserving part of its history.
- Unique architectural style: If a box home isn’t for you, you’ll enjoy living in a house with a distinct old-world style. Historic homes are often constructed in stunning architectural styles, including Mid-century, Georgian, Colonial, Federal, Victorian, Spanish and more.
- Location: Many of these homes are in well-established neighbourhoods that have grown around them.
- Lot size: Many older houses have larger lots compared to new builds.
- Financial potential: There is potential to increase the value once renovated.
What are the Cons of Owning a Heritage Home?
- Repair costs: Replacement of windows, roof, wiring, and other areas that do not meet current building code requirements.
- Energy efficiency: Many of these buildings are not energy-efficient because they lack updates, which can lead to higher utility bills.
- Unwanted surprises: Some concerns in older homes include finding asbestos, mould, rot, termites, and structural issues. Having a thorough home inspection before purchasing is essential.
- Labour of love: If you’re buying a historic home, you’d better have a toolkit ready; they’re going to require a lot of work. From water damage and electrical issues to structural problems, historic homes without proper preservation will most certainly fall into disrepair. If you decide to take on a historic home, make sure you have the funds to restore it.
- Designated historic districts come with strict rules: perhaps the biggest con of owning a historic home is that owners must adhere to the guidelines set by local laws. That means you may not be able to make changes or additions to your home without the city’s permission.
- Expensive insurance: Buying a historic home will probably mean that your insurance premium can skyrocket. According to esurance.com, “many personal insurance companies don’t offer the type of coverage you’ll need to insure your home, meaning you often have to go with historic property insurance, which can be more expensive.” Additionally, an older home with structural issues (e.g., an old roof or outdated building materials) can lead to higher insurance rates.
Heritage Homes and Home Insurance: Is it More Expensive?
In general, the more expensive a home is to repair and maintain, the more expensive its insurance will be. Many historic properties weren’t built to meet today’s building and safety standards. Therefore, the process of buying an older home and understanding the requirements can be very different. It’s important to understand how the risk involved with buying an older house affects insurance premiums.
How Does Insurance Coverage Work?
Insurers are happy to insure newer, well-constructed, well-maintained buildings. Heritage homes can be more difficult due to potential risks. Some heritage homeowners are falsely told they cannot obtain insurance for their buildings. Home insurance is available for these types of properties when they are brought up to code. Insuring a heritage home takes a little extra care and consideration to account for the unique construction and materials.
What you should understand about insuring a heritage property:
- On the surface, heritage insurance typically covers the same things that homeowners’ insurance will
- Check whether your insurer can provide an appraiser experienced in evaluating heritage properties. They can provide an accurate assessment of your home’s true value and potential future repair or replacement costs.
Some insurance companies may require changes to a property before they will issue coverage.
- Adequate coverage is essential for these types of homes. Be sure that you have an in-depth discussion about the requirements and details with your isure broker. Without adequate coverage, you might end up paying for the cost of meeting your home’s heritage requirements in the event of a loss.
- Make sure all reports and inspections on the home are complete before buying it. Insurance companies recognize well-maintained properties with good claims records. Also, keep accurate records and all necessary documents pertaining to home repairs, updates, or renovations.
- Record and photograph any renovation or upgrades so your insurer can accurately assess the replacement cost in the event of a loss.
Your isure broker will be able to work with an insurance company that understands the specific risks associated with a heritage home.
Should You Buy a Heritage Property?
Before buying a heritage property, be sure to weigh the pros and cons list above. If the joys of owning a heritage home with its own history, charm and character outweigh the pain of possible repairs, high insurance rates and strict rules, then you have your answer. Additionally, there aren’t that many heritage houses around. In fact, in Guelph, there are fewer than 100 of them. They rarely come up for sale, are mostly detached homes and generally attract a lot of attention when they do.
If you do decide that an investment in a historic home is for you, be sure to speak with one of our isure brokers to learn more about heritage properties and homeowner’s insurance. For more information about heritage designations, visit the Ministry of Citizenship & Multiculturism.
Safeguard Your Home
Get a free home insurance quote today and protect what matters most.
Home insurance premiums in Ontario vary based on factors, including Read more
Your home is probably one of the biggest investments you’ll Read more
Purchasing a new home can be a stressful, scary time Read more
