Frequently Asked Questions
How do I value a historic barn for insurance purposes?
This is always a tough question to answer. In my own case, my county assessor tried to tell me that my renovated barn was a new building! Once I convinced them that it was not, they assessed it using the cost of renovation as a baseline. So that is one way to approach the issue, especially for insurance purposes. You would not want to insure a barn for any less than what you had invested in it. Another approach is to consider what you paid for it. Often the improvements in a real estate transaction are valued, i.e., so much for the house, so much for the garage, so much for the accessory buildings, etc. And if the barn is in really bad shape, most companies won’t insure them at all.
Some insurance companies will insure for full replacement value also, so you would want to set the value high enough that you could rebuild the structure from the ground up in case of fire, tornado, etc. In my case, I spent approximately $80,000 on the renovation, which included several modern improvements—electricity, water, HVAC, so I insured it for $100,000 just to be sure I could rebuild a facsimile if necessary. Not everyone will want to take that route, of course. Maybe Aaron Curtis would have some insight into this—what would it cost to build a timber frame barn from scratch?
I am not sure, but I think that real estate appraisers would have some model to follow when appraising farm buildings, but of course if a barn also has historic value, as mine does, it is always worth more that just the price to rebuild. With my historic residence (1830), I actually walked my insurance appraiser through the structure pointing out its most valuable features, such as original fireplaces, flooring, windows and doors, hardware, and tried to estimate replacement costs, which was pretty tedious. The real problem for me was that the more value I said things had, the more insurance I had to buy. Bottom line, don’t underestimate, a timber frame historic barn is virtually irreplaceable.