CIS Group Scoop

Older Home Reconstruction Cost - Watch Out!

Posted by Dana Williams on Apr 14, 2015 10:00:00 AM

CIS Group relies on its high value inspection company, Cornerstone Appraisal Services, LLC, to assess many of its largest and most complex residential inspections.  Having over 20 years’ experience, Cornerstone’s appraisers, inspectors and staff are well versed in both the valuation and loss control associated with these homes—including expertise in the valuation of older homes.

The following is a brief synopsis of some of the unique considerations when valuing older, residential homes/structures.

1936 Home, ITV Inspections, Reconstruction Cost

One of the most difficult ITV issues facing insurance underwriters and agents, as well as appraisers, is to properly value an older home.  Many insureds, agents and even home builders are only vaguely aware of the extremely high costs associated with repairing or replacing older homes.  Therefore, establishing an accurate reconstruction cost on this type of construction is very important because the actual exposure can be much greater than current day construction. 

Under insurance on an older home can mean paying policy limits on what should have been a partial loss. Inadequate ITV exacerbates the claims process by making it more difficult to secure a qualified contractor versed in older home architecture and construction.  Older home restoration is often further complicated by delays as rebuilding to code issues are grappled with and architects struggle to recreate, replace or splice into obsolete construction methods and design. 

The general definition of an older home is one constructed before the end of World War II (1945).  After the war, track homes became the norm as the construction industry standardized construction materials and techniques. As a result of this standardization, features found in pre-1945 homes became “custom.”  Some of the pre-1945 features are now considered to be an upgrade or unique include:


-hardwood flooring/subflooring and carpet over   hardwood

-hardwood trim and custom milled moldings 

-quality mosaic ceramic tile floors

-decorative exterior woodwork

-true dimensional lumber (2 x 4 inches vs.

  1 ½ x 3 ½ inches used today)

-smaller interior rooms & more interior partitions

-lath & plaster interior walls and ceilings

-higher interior ceilings (average 9 to 10 foot)

-unique sized doors & windows (no standard sizes)

-mission clay tile, slate or heavy shingle roof

-solid wood doors and windows

-obsolete construction methods, i.e., balloon & Victorian construction

-built-in plaster niches and solid hardwood cabinets

-mansard or steeply pitched roof

-solid brass plumbing, lighting and door fixtures

-multiple masonry fireplaces


Old home features will vary slightly by region; however, most are consistently found in pre-1945 construction. 

Other factors that will significantly impact the reconstruction cost of older homes include:

  • Unique features of older homes require the use of specialized contractors who charge 15-30 percent more than new home builders because of their extensive knowledge of older construction architecture, materials and methods.
  • Older homes typically need extensive updating to meet current building codes in a large partial and total loss scenario.
  • Code requirements almost always impact the location of the home (setbacks & easements), electrical and plumbing systems, windows, garages and fireplaces.
  • Salvage houses are utilized to replace many of the hard to find features.
  • Expert architectural services and on-the-job supervision is often required to accommodate the strict construction guidelines of the local or county historical oversight committees.
  • No matter how simple the original design, all older homes are considered “custom” at the time of loss.

Stay tuned for additional stories from the High Value division at CIS Group.


Dana Williams
VP, Cornerstone Appraisal Services, LLC - A CIS Group Company


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Topics: Reconstruction Cost