Historic home insurance glossary

Terms are listed alphabetically. Several link to a full guide.

Actual cash value (ACV): A settlement value that considers depreciation. The calculation can depend on the policy and jurisdiction. Compare settlement terms.
Admitted insurer: An insurer licensed in the state for the relevant business. Applicable guaranty-association protection has eligibility rules, limits and exclusions; it is not an unlimited guarantee.
Agreed value: A value agreed under the policy for a specified item or interest. Conditions, deductibles and exclusions still matter; confirm the actual settlement provision.
Balloon framing: A framing method with long vertical wall members extending across more than one level. Identify the actual construction and any fire-stopping questions through a qualified professional.
Builder's risk: Insurance for a construction or renovation project. Covered property, causes of loss, occupancy restrictions and other terms depend on the form. Plan a renovation.
Certificate of appropriateness: Approval from a local historic commission for exterior changes, including repairs after a loss, to a property in a local historic district.
CLUE report: A consumer claims-history report used by insurers in some underwriting processes. Ask the reporting company about access and correction procedures.
Contributing property: A building that adds to the historic character of a designated historic district.
Coverage A: The base dwelling coverage and stated limit in a policy. Other provisions may add protection or impose particular sublimits and conditions.
Declarations page: The summary page of a policy, showing limits, deductibles, endorsements, premium and policy dates.
Dwelling fire policy (DP-1, DP-3): Dwelling policy form labels often used for rental or other eligible residential properties. Occupancy eligibility, covered causes and liability options depend on the form and insurer.
Extended replacement cost: A provision allowing a specified amount above the dwelling limit for qualifying rebuilding costs, subject to conditions and exclusions.
FAIR Plan: A residual-market property insurance program established under state law where available. Structure, eligibility, limits and coverage vary. Review possible alternatives.
Four-point inspection: A short inspection of a home’s roof, electrical, plumbing, and heating and cooling systems, often required by insurers for older homes. Four-point inspections
Functional replacement cost: A settlement method that pays for modern materials that do the same job at lower cost, such as drywall instead of plaster.
Guaranteed replacement cost: A provision that can address qualifying rebuilding costs above a stated dwelling limit. Read the eligibility conditions, exclusions and rebuilding requirements.
Guaranty fund: An insolvency-protection mechanism under state law, subject to eligibility and limits. Do not assume a surplus lines policy has the same protection as an admitted policy.
HO-3: A homeowners form generally using open-peril building coverage and named-peril contents coverage, subject to exclusions, conditions and endorsements. The offered form controls.
HO-5: A homeowners form generally using open-peril coverage for both building and belongings, subject to exclusions, conditions and endorsements.
HO-8: A modified homeowners form often associated with older houses. Review its covered causes of loss and settlement provisions carefully. Compare HO-8.
Insurance to value: The relationship between the amount insured and an appropriate rebuilding estimate. Read any minimum-insurance conditions without treating them as a recommendation to underinsure.
Knob-and-tube wiring: An older wiring system using ceramic knobs and tubes. A qualified electrician can identify what remains active and assess its condition. Wiring guide.
Law and ordinance coverage: Another name for ordinance or law coverage.
Local historic district: An area designated by a city or county in which a historic commission reviews exterior changes. Its rules can affect how a house is repaired.
Market value: What a buyer would pay for the house and the land. It is not the right basis for a dwelling limit.
National Register of Historic Places: The federal list maintained by the National Park Service. Listing alone does not impose federal restrictions on a private owner’s work, but federal involvement, local rules and other obligations can matter.
Nonrenewal: An insurer’s decision not to renew a policy at the end of its term. Each state sets the required notice period and permitted reasons.
Ordinance or law coverage: Coverage that may address eligible costs of complying with requirements after a covered loss. Triggers, limits and exclusions vary. Review the questions.
Preservation easement: A legal agreement, often donated to a preservation organization, that restricts changes to a historic property and can require restoration after a loss.
Replacement cost: The cost to repair or rebuild with materials of like kind and quality, without subtracting depreciation.
Roof payment schedule: A roof settlement method that pays a declining percentage of the replacement cost as the roof ages.
Scheduled personal property: Coverage listing specified belongings. Ask how value is established and whether agreed-value terms, deductibles or special conditions apply.
State Historic Preservation Office (SHPO): The state office that runs historic preservation programs, including National Register nominations.
Substantial improvement: A defined term in floodplain-management rules. Federal definitions include qualifying thresholds and exceptions; ask the community floodplain manager how the rules apply to a proposed project.
Surplus lines insurance: Insurance placed through the applicable surplus lines framework with an eligible nonadmitted insurer. Placement rules, taxes, fees and insolvency protections differ from the admitted market.
Vacancy condition: A provision affecting coverage when a building meets the policy’s vacancy definition. The definition, duration, affected causes of loss and exceptions must be read in the actual contract.
Wind mitigation inspection: In Florida, an inspection on a standard state form that documents wind-resistant features for possible premium discounts.

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