Owners of heritage listed property are custodians of valuable community assets, which contribute to sense of place and identity for the places in which we live. However, one challenge many owners can face is higher insurance premiums that might come with such a listing. While insurers need to consider factors like age and structural integrity when assessing risk, the reality is that heritage-listed buildings can be automatically given an inflated premiums whether the condition of the property warrants it or not. In some cases certain insurance companies even refuse to cover heritage listed buildings as a matter of policy.

The issue often boils down to insurers applying broad, one-size-fits-all policies when determining premiums for heritage-listed buildings. In many cases, simply being listed as a heritage property can trigger a price hike, regardless of the building’s actual condition or risk level. This practice doesn’t take into account several important factors:

• Renovations and updates: Many heritage-listed buildings have been renovated to meet current safety standards, reducing their actual risk. Insurers may fail to recognize these upgrades, instead categorizing the entire property as “high-risk” due to its historical designation.
• Quality of construction: Heritage buildings are often constructed with superior materials and craftsmanship, which can make them more durable and resistant to damage than more modern buildings.
• Heritage does not mean old: Properties as young as 20 years old have been heritage listed, however the misconception that a heritage building must be old is yet to be overcome.
• National Trust classification is non-legislative: In Victoria, if a building is listed only by the National Trust, there are no legal powers or requirements attached to that listing. The National Trust cannot legally insist on authentic restoration or ongoing maintenance of such properties.  

While in the case of properties that require like for like replacement of historic features, restoration costs may be higher in the event of damage, this doesn’t mean that the risks associated with these buildings are inherently greater. In fact, in many cases, these buildings are more resilient than their modern counterparts due to superior construction materials and craftsmanship.

Moreover, insurance should reflect the individual risk of each property, not blanket assumptions based on misconceptions of what a heritage listing means for a property. By applying uniform rates for all heritage properties, insurers are unfairly penalizing owners who are preserving history without adequately assessing the actual risk associated with each property.

Resources for Heritage Custodians

There is very little research on the relationship between heritage and insurance that is specific to Australia. In 2012, the NSW government undertook a survey to assess the disparity in insurance premiums between heritage properties and non-heritage properties. It was found that ‘very few’ insurers charged a higher rate for heritage properties, instead finding that premium costs were more responsive to factors of age, condition of plumbing and wiring, and materiality. No such study has been carried out more recently, nor within Victoria.  

Instead, the most prominent publications relevant to Heritage and Insurance within Victoria are on the instances of home owners not informing their insurers when their homes obtained heritage status, which resulted in their insurance being voided when claims were later made. However, such reports simplify the issue, making it seem as though all insurance companies follow the same conditions around heritage properties. This serves to discourage potential buyers from ownership and custodianship of heritage places, a message that poses significant risks to the ongoing care of our heritage.  

Insurance companies take varying approaches to heritage properties, the variation being most significant in their depth of understanding of heritage repair implications. Thus, it comes down to the party seeking insurance to choose the policy that will benefit them best.

The Find an Insurer site is a helpful resource to identify insurance companies that will cover properties with heritage value. There is very little information, if any, on heritage conditions within the companies’ respective Product Disclosure Statements, thus direct contact is required to determine policies on heritage.  

Negotiating your Premium

If you’re a heritage property owner facing inflated premiums, here are some practical steps you can take:

1. Document Modern Upgrades: Ensure that any modern renovations, safety features, or restorations are well-documented. This includes things like fireproofing, updated wiring, plumbing, and foundation repairs. Insurers often charge higher premiums for buildings they consider outdated, so proving your property has been updated can make a significant difference.
2. Get Multiple Quotes: Don’t settle for the first quote you receive. Contact several insurers to get a range of premiums. You may find that some insurers offer better rates if they recognize the specific value of your heritage property, including its resilience and modern improvements.
3. Challenge the Blanket Assumptions: If your insurer raises premiums based purely on the heritage listing, challenge them by highlighting the specifics of your property’s condition. Point out that the building has been maintained or upgraded, and provide evidence that its risk profile is comparable to other non-heritage properties.

Ultimately, there’s a need for wider policy change to ensure that heritage property owners aren’t unfairly burdened by inflated insurance premiums. An insurance premium should reflect the age, construction and physical condition of a building whether it is heritage-listed or not. Heritage properties are a vital part of our cultural heritage and built environment, the deserve to be protection- not just through planning regulations, but also through fair insurance practices.