Last year, Larry Richards thought he’d found the perfect historic home.
It’s in the 400 block of Reeves Drive, and as far as Richards was concerned, it was exactly what his family wanted. It’s listed on the National Register of Historic Places, just a few blocks from downtown Grand Forks, with a spacious lawn and an expansive second-floor balcony. And though it was built in 1885, the interior had been remodeled not long before – and so Richards and his family jumped at the chance. That was in mid-2019.
By late July, his home insurer told Richards the company was ending his policy because the home was on a historic registry.
For Richards, his insurer’s move came as a surprise. He’d thought his policy was more or less standard, and the National Park Service website notes that historical properties “should be treated like any other house for insurance purposes.” His insurer’s decision, upheld by the North Dakota Insurance Department in December, has raised questions for him about what’s happening – or could happen – to historic buildings and districts elsewhere.
"I guess their argument apparently is (that with) older historic homes, they're entitled to have substandard insurance?" Richards said last week, expressing strong concerns about the effect such a policy could have on local historic districts. “If they really implement these things … you're going to have less competition, you're going to have higher quotes. It's going to have an impact.”
Richards appealed the decision by his insurer, Safeco Insurance, to state regulators. By December, he received a letter back that left the company’s decision in place.
“The (state Insurance) Department has determined that the reason that Safeco does not cover homes that are on the Historic Registry is noted based on the age or location of the home, (but) rather the replacement costs associated with the property,” a department official wrote to Richards. “We recognize that being on the Historic Registry does not require a home to be repaired or upkept in any particular way under North Dakota law, but Safeco policies are written to cover the home for the replacement cost of any lost or damaged component.”
That left Richards more than unsatisfied – he feels Safeco merely used his home’s historical status to offload an older home from its list of insured assets.
“When I read it, (state regulators) just took the word of the insurance company. They didn't get into the impact. They didn't consider the effect that this has, or a possible ulterior motive they have,” Richards said.
A spokesperson with Safeco and Liberty Mutual Insurance said the company does not comment on individual decisions to provide insurance, though “each property is considered on its individual merits.” But the company didn’t respond to questions asking how many homes in North Dakota and beyond have been declined coverage for their historical status, or how long any policy that disqualifies those homes has been in place.
Those questions are important, though, because Richards’ home is in Grand Forks’ Southside Historic District. City documents show that, as of 2015, it was not “individually listed” on the registry, but was listed for “contributing to" a historic district. Those same documents show that hundreds of Grand Forks properties are considered listed for the same reason, in local historic districts near downtown and UND.
Susan Caraher, the city coordinator for Grand Forks’ historical preservation commission, downplayed concerns about those homes losing their insurance too.
“What I would say is that there are many insurance companies that do insure historic properties, so I don’t think that’s necessarily a broad concern,” she said. “It’s perhaps company and or policy specific.”
But Richards’ case has also drawn interest from the North Dakota Historical Society. Claudia Berg, the group’s director, submitted a letter to state regulators that expressed concern on Richards’ behalf, along with a three-page memo laying out how designation as a historic place should almost never affect an insurer’s bottom line.
“Should a listed property become damaged or be destroyed, there is no state or federal requirement that the property be rebuilt or repaired to reflect its historic appearance nor that a particular contractor be used to make repairs,” the memo reads.
And Lorna Meidinger, an architectural historian and a national register coordinator with the state historical society, also points out that there are political effects to the kinds of policies that Safeco appears to have. By making it more burdensome to own a historic property, those kinds of policies can hurt the long-term health of historic neighborhoods, whose status can help neighborhood leaders negotiate the development of high-traffic roads, the placement of cell phone towers or other items to keep that history better-preserved.
And while cases like Richards’ are rare, Meidinger said, it’s even rarer for someone to publicly fight the issue the way Richards has.
"At this point, we just need to keep our eyes open and kind of watch the market. There are insurance companies that will insure historic properties,” Meidinger said.
Ashley Kelsch, a spokeswoman with the state insurance department, said that while North Dakota is able to regulate insurance companies, insurance on historic homes “is typically considered a special kind of policy offered by an insurance company” – and that this limits what the department can do.
For Richards, the issue is still one of basic unfairness. In a letter to the editor he submitted to the Herald, he calls it an "unfortunate circumstance for both consumers and historic preservationists."
“At the end of the day, and this is where it comes down to me, is that if this home was a few blocks in one direction, and not in a historic district, they would insure it,” he said in a telephone interview with the Herald last week. “And that's not right.”