Is Your Brownstone Property Insured as Property Values Rise?

New York’s iconic brownstones have always held timeless appeal. While real estate markets naturally fluctuate, brownstones—particularly in Brooklyn and Manhattan—consistently maintain their reputation as highly desirable properties. Their unique architectural character, limited availability and historic charm bolster their value compared to other types of housing.

If you own one of these coveted properties, you can rest assured that the market value will likely hold steady and may appreciate over time. Making sure that your brownstone insurance keeps pace with the realities of rebuilding costs, however, is a different story.

Brownstone Insurance: Market Value vs. Replacement Cost Explained

Many homeowners monitor real estate prices through online listings and valuation tools, even when they have no plans to buy or sell their home. While these numbers offer a snapshot of market value—what someone might expect to pay for the property, including the land—insurance companies focus on something different: replacement cost.

Insurance replacement cost refers to the amount it would cost to rebuild the structure in the event of a total loss. In New York City, the cost per square foot—which includes both labor and construction materials—varies by neighborhood. Other factors that can affect replacement cost include construction materials, finishes, and the architectural details that make brownstones unique.

A knowledgeable insurance partner will have the current construction costs for your neighborhood. Review replacement cost limits at least once a year—or after any significant home improvement projects, as discussed below.

Modernizing Your Policy: Materials, Renovations and Risk

Your brownstone may look historic on the outside, but if you’ve updated the interior, your insurance policy needs to reflect those changes. Renovations, rising construction costs and inflation can have a significant impact on the cost of rebuilding your home after a loss.

Many brownstones combine historic architectural details, such as exposed brick and custom millwork, with modern amenities, like high-end kitchens and expanded bathrooms. Such elements significantly increase the cost per square foot if you need to rebuild.

Some renovations will increase the value—and replacement cost—of your brownstone. At the same time, other improvements, such as replacing the roof or updating the electrical system, may reduce your risk and qualify for lower premiums. Consult your insurance partner any time you start planning a home improvement project to understand the potential impact on your insurance policy and to protect yourself during the construction phase.

Hidden Gaps in Brownstone Insurance Most Owners Miss

Historic properties like brownstones have special needs. Trying to save money with a cookie-cutter insurance policy could result in coverage gaps. Consider the following supplemental protections:

• Loss of Rents Coverage is crucial for owner-occupied brownstones with rental units. This supplemental coverage replaces lost rental income if a covered peril makes rental units uninhabitable.
• Ordinance or Law Coverage provides additional funds to bring a property into compliance with current construction codes—especially important in a city as highly regulated as New York.
• Umbrella Liability Coverage offers additional protection beyond standard liability limits, often at a reasonable cost. (Note: You’ll want to consult your financial advisor to determine how much protection you need.)

Specialty brownstone policies often bundle many of these protections. Working with a broker who specializes in insuring these historic properties will help you choose the right policy for your needs.

Why Annual Insurance Reviews Are Essential for Brownstone Owners

From rising labor and construction costs to rate hikes due to climate change and aging infrastructure, today’s insurance market is tough for most homeowners. Brownstone owners face additional challenges due to the unique characteristics of their historic homes. Reviewing your policy terms and limits with your insurance partner annually will ensure you have the right level of coverage for the current market.

Annual reviews also provide an opportunity to discuss market changes and ways to improve your brownstone’s risk profile. Replacing an outdated plumbing system, for instance, lowers the likelihood of water damage to plaster walls or custom millwork.

Protect Your Brownstone with City Building Owners Insurance

Stu Cohen launched the City Building Owners Insurance program to meet the unique needs of New York City brownstone owners. He and his team of risk management experts educate brownstone owners to help them select the right coverage and qualify for the best possible rates. Their knowledge of industry players and programs allows them to recommend the best policy for each owner’s specific situation.

Contact us at 877-576-5200 or request a free, no-obligation insurance review to ensure you have the right policy for your historic home.