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For historic homes, the chief insurance consideration is typically calculating replacement costs so that the building’s cultural and educational qualities—the factors that make it unique—can be restored after a damaging event. “If something happens that places the historic designation at risk, the property has to be able to [remedy] that or it will no longer have any value as a [destination for visitors],” says Richard Standring, Northeast regional manager for risk services at Fireman’s Fund Insurance Co.

The cultural worth of an older building often resides in the labor and craftsmanship embodied in its architectural details. But as mid-20th-century buildings increasingly join the ranks of the National Register of Historic Places, calculating the replacement value has become more challenging. Unlike older historic buildings made of commonplace materials such as wood and brick, properties built in the 1950s and 1960s often incorporated one-of-a-kind glass, metal and plastic composites that were fabricated in limited production runs.

Insurers are becoming more creative at addressing such considerations. If there’s a total loss, for instance, rebuilding might not be an option; some carriers will instead pay to construct a visitors’ center or similar educational facility.

“If you can continue the mission of an organization, we’ll give you the agreed value back instead of just the standard clause that says you’ll get actual cash value. We really try to keep organizations alive,” says Paul A. LaVardera, program director of Maury Donnelly & Parr Inc. and National Trust Insurance Services, which specializes in historic properties.

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