The devastating wild fires in California have highlighted a growing national issue – a push by insurance companies to get out of the insurance business by dropping customers in high-risk areas. The increasing number of natural disasters brought on by climate change have put a great deal of stress on the insurance industry. Even before the fires, some companies had already made the decision to pull out of certain states that are regularly hit by increasingly intense disasters, such as Florida. A December, 2024 New York Times article summarizes the issues well.
What does this have to do with historic preservation? Well, insurance companies now seem to be using any justification that they can to raise rates or drop homeowners altogether. In my role at the Massachusetts Historical Commission (MHC), I frequently receive inquiries from property owners where their insurance company has raised their rates or will not insure them because their house is included in the Massachusetts Cultural Resource Information System (MACRIS), is listed in the National Register of Historic Places, or is part of a local historic district.
This fear of historic preservation designations on the part of the insurance companies stems from a lack of understanding about these designations. The insurance companies see these designations and assume they will mean higher repair or replacement costs. They assume there will be a detailed review of the project by a local or state commission. And I have even heard that some insurance companies believe if a house was built in 1780, anything that is used to repair or replace it must be from 1780 – which, aside from being impractical, is just poor preservation practice! Reconstructing a building like that creates a false sense of history, portraying a building as being from 1780 when in fact it was never that assemblage of materials in 1780.
Local historic district designation does require a review process at the local level for any exterior changes to a property in a local historic district. But, exterior only! Local historic districts do not review interiors, so property owners can use whatever materials they would like in there. And many local historic districts are open to alternative or modern materials; the National Park Service recently updated their “Preservation Brief” on substitute materials, helping to clarify best practices around implementing them. Finally, local historic districts in Massachusetts can adopt an exemption for the reconstruction of buildings damaged by fire or other natural disasters, making the replacement process easier (M.G.L. ch.40C §8).
Unlike local historic district designation, listing in the National Register of Historic Places has very few regulations that will impact a property owner’s use or alteration of their property. While there are review processes at both the state and federal levels, these are only triggered by the use of state or federal permitting, licensing, or funding. Except in extreme disaster situations, most private property owners are not using federal funds to repair their roof, or requiring state permits to rebuild their house. As long as a property owner is following relevant local building and zoning codes, National Register listing will have no impact on their use or alteration of their property. You can read more about the state review of National Register-listed resources here, and the federal review here. Note that it is the state or federal involvement in a project, and not National Register listing itself, that triggers these reviews.
Finally, there is MACRIS – which is not actually a designation at all, but instead a database of all documented historic resources in Massachusetts. Because it is only a database, and not a designation, it does not come with any corresponding regulations. While some communities use MACRIS as their trigger for demolition delay review, that is it – there is no more in-depth review triggered by MACRIS at the local, state, or federal levels.
Because these insurance inquiries have been increasing in frequency, the MHC has developed two memos that address the two most frequent designations – National Register listing and inclusion in MACRIS. Contact the MHC if you would like a copy of these to provide to your insurance agent. This is the approach taken by other state historic preservation offices, as discussed in this National Trust for Historic Preservation webinar on the issue. And the National Park Service has added a question to their National Register FAQ specifically addressing the insurance issue (question four). Hopefully as word spreads among insurance companies, historic preservation designations will be less of an immediate trigger for increased rates or dropped policies.