By the Lapera Insurance Team · Reviewed by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394)
You love the plaster walls, the oak trim and the way the stairs creak in the same spot they have for seventy years. Then the insurance application asks about your electrical panel, your supply lines and the year the furnace went in, and suddenly the house feels like a problem to be explained. It isn't. An older home just needs a policy built for the way it was built. Here is what underwriters look at, which coverages matter most, and how to set it up the right way.
For an older Illinois house, the best home insurance is the right setup, not a brand: a replacement cost settlement that fits plaster and custom trim, ordinance or law coverage for code upgrades, and water backup protection for aging pipes. Updated wiring, plumbing and heating, plus proof of the update years, usually widen your options. If standard carriers decline, the Illinois FAIR Plan is the backstop.
We insure a lot of older houses, and the conversation usually starts the same way. Someone has a quote that looks fine, or a renewal that suddenly doesn't, and they want to know whether the policy actually fits a house built before anyone had heard of a GFCI outlet. This guide is about the building itself: its wiring, pipes, heating, walls and the codes it was built under. If your questions are more about your own stage of life, like retirement income or a trust, our companion guide on the best home insurance for seniors in Illinois covers that side.
Why Does a Home's Age Change the Policy?
TL;DR: An older home was built with materials, methods and codes that differ from today's, so it can cost more to repair, carry systems insurers want to ask about, and need coverage a newer house rarely uses.
Age by itself isn't the issue. A well-kept 1925 bungalow with updated wiring and plumbing can be easier to insure than a neglected house built in 1985. What age changes is the set of questions worth asking. The house was built under older codes, with materials that are expensive to match today, and some of its original systems may still be in the walls.
That shows up in the policy in three ways. First, the repair math: plaster, hand-cut trim and old-growth hardwood take more labor than drywall and stock molding. Second, the rules: if a covered loss happens, the parts you rebuild generally have to meet today's building code, not the code from the year your house went up. Third, the hidden systems: wiring, supply lines, drains and the sewer line out to the street age quietly, and an underwriter wants to know what shape they are in before writing the policy.
None of that means an older house is a bad risk. It means the house deserves a policy that was set up on purpose. The rest of this guide walks through how we do that, piece by piece.
Lapera Insurance Agency is a Farmers Insurance agency at 530 Barron Blvd in Grayslake, Illinois. Our team has served Illinois families since 1993, with over 40 years of combined experience, and we have written plenty of policies on houses older than the agency itself. We quote home insurance with Farmers and the Farmers family of carriers, plus additional markets. Every guide on this site is reviewed by a licensed Illinois agent before it publishes.
What Do Insurers Look at Before They Write an Older Home?
TL;DR: Most carriers focus on the age and type of the electrical, plumbing and heating systems, the roof's age, the foundation, and the condition of the sewer line, and they want the year each one was last updated.
Underwriting is the carrier's decision about whether to write the house and on what terms. For older homes, the questions cluster around the systems that can cause a fire or a water loss. The Insurance Information Institute lists an old plumbing, electrical or heating system among the reasons a home can be harder to insure, because it raises the chance of fire or water damage. Some carriers may ask for an inspection of the roof, electrical, plumbing and heating before they bind a policy on an older house.
Electrical
Panel type and amperage, whether there are fuses or breakers, and the wiring itself. Knob-and-tube and older aluminum branch wiring are the questions we hear most.
Plumbing
Supply line material and age. Polybutylene, galvanized steel and cast iron drains are materials many insurers ask about, along with the water heater's age.
Heating
The furnace or boiler type and year, any space heaters or wood stoves, and whether there is or ever was an oil tank on the property.
Roof age
The roof's age and material are rating and eligibility factors on every home, older or not. Expect to be asked the year it was last replaced.
Foundation and basement
Visible cracks, settling, past water in the basement and whether the lower level is finished. A finished basement raises the stakes on water coverage.
Sewer line
The age and material of the line from your house to the street. It is often the oldest pipe on the property and the one nobody has seen.
Heating deserves a special note. The Insurance Information Institute home buyer's guide warns that many insurers will not provide policies for homes with an underground oil storage tank, and suggests finding out whether one exists before you buy. Plenty of older Illinois houses switched to gas decades ago and the old tank was simply left in the ground. If you don't know, it's worth finding out.
Wiring gets the most scrutiny for a reason. The Consumer Product Safety Commission's guide to repairing aluminum wiring (Publication 516, June 2011) says aluminum branch wiring was installed in homes from about 1965 to the mid-1970s, and that homes built before 1972 and wired with aluminum were 55 times more likely than copper-wired homes to have one or more outlet connections reach fire hazard conditions. Many of those homes have since been remediated, which is exactly the kind of update a carrier wants to see documented.
| What the carrier finds | How it tends to land | What helps |
|---|---|---|
| Updated panel and wiring, with permit or invoice | Usually a plus | Keep the electrician's invoice and permit on file |
| Furnace or boiler replaced in recent years | Usually a plus | Note the year and keep the install paperwork |
| Fuse panel or an older breaker panel | Expect questions | An electrician's inspection letter, or a panel update |
| Polybutylene, galvanized or cast iron lines | Expect questions | Know what you have, and document any replacement |
| Knob-and-tube wiring still in use | Often a hurdle | Ask us what a carrier would need to see |
| Underground oil tank on the property | Often a hurdle | Find out whether one exists before you apply |
If you aren't sure what year the panel was replaced, say so and go find out. A guess that turns out wrong can cause trouble at claim time. An invoice in a folder makes the answer easy and gives the underwriter something solid to rely on.
Which Settlement Fits an Older House: Replacement Cost, Modified Replacement or Actual Cash Value?
TL;DR: Full replacement cost pays to repair with like kind and quality, modified replacement cost pays to repair with today's standard materials, and actual cash value subtracts depreciation, so the choice decides whether your plaster and trim come back the way they were.
Your dwelling coverage has two parts: the limit, and the way a loss is settled. We cover the limit in depth in replacement cost vs. market value in Illinois, so here we'll stay on settlement, which is where older homes get treated differently.
- Replacement cost. Pays to repair or rebuild with materials of similar kind and quality, without subtracting depreciation. For a plaster-and-lath house, that is the version that aims to put the walls back as plaster. The Insurance Information Institute notes that plaster walls, ceiling molding and wood floors can be costly to replace, and that those same features can raise the cost of insurance.
- Modified replacement cost. Some carriers offer this on older homes when full replacement cost isn't available. The Insurance Information Institute explains that this version pays for repairs using the standard building materials and construction techniques in use today. In plain terms, damaged plaster may come back as drywall, and custom trim may come back as stock molding. The NAIC Consumer's Guide to Home Insurance (2022) also describes a Modified Coverage Form for older homes where the cost to rebuild is greater than the market value.
- Actual cash value. Pays replacement cost minus depreciation, considering the age and condition of the property, as the Illinois Department of Insurance defines it. On a house with decades of wear, that deduction can be large.
Neither modified replacement nor actual cash value is automatically wrong. On some houses, especially ones that are hard to place, they are what makes coverage possible. The point is to choose on purpose, knowing what comes back after a loss. If the character of the house matters to you, ask for full replacement cost first and see whether the house qualifies.
One related coverage is worth knowing about. Farmers lists matching of undamaged property coverage among its optional home coverages, which helps pay to make repaired or replaced property match the undamaged parts of the home (availability varies by state and policy). On an older house, where the original finish may be hard to source, matching can be a real question after even a partial loss.
Whichever settlement you choose, the limit still has to be right. The Illinois Department of Insurance says it is important to insure your home for at least 80 percent of its replacement value. We'd rather start from a full rebuild estimate than aim for the floor.
Why Does Ordinance or Law Coverage Matter So Much on an Older Home?
TL;DR: Because rebuilding after a covered loss generally has to meet today's building code, a standard policy typically excludes that extra cost, and an older house is the one most likely to fall short of current code.
Here is the gap in plain English. Your house was built to the code of its day. If part of it is damaged and has to be rebuilt, the local building department will usually require the new work to meet the current code. That can mean more than putting back what was there. The Illinois Department of Insurance lists ordinance or law among the typical homeowners insurance exclusions.
The fix is an endorsement. In the words of the NAIC consumer guide, an ordinance or law endorsement pays for the extra expense to rebuild your home in compliance with building codes. The Insurance Information Institute adds that guaranteed replacement cost coverage generally doesn't cover code upgrades either, so this is a separate decision, not something a higher limit solves on its own.
A grease fire damages a kitchen in a 1950s Illinois house. The cabinets, ceiling and a wall have to come out, and so do the circuits inside that wall. When the electrician pulls the permit, the building department requires the affected circuits to be rewired to the current electrical code, with the newer protection and layout that code calls for, rather than reconnected the old way. Without ordinance or law coverage, the policy pays to repair the fire damage, and the added cost of the code upgrade can land on the homeowner. With the endorsement, that extra cost is covered up to the endorsement's limit. This example is illustrative only, not a coverage determination; what applies depends on the policy, the endorsement limit and the local code.
Ordinance or law limits are often set as a percentage of the dwelling limit, and options vary by carrier. On an older house, we look at the age of the wiring, plumbing and structure when we talk through how much to carry. Ask us which of our markets offer it for your home and at what limits.
Look for the words "ordinance or law" or "building code" on your declarations page or endorsement list. If you can't find them on a house built decades ago, that is the first question to bring to us.
Do You Need Extended Replacement Cost on an Older Home?
TL;DR: Often yes, because rebuild estimates on older, one-of-a-kind houses are harder to pin down, and extended replacement cost adds a cushion above the dwelling limit if the real cost runs higher.
Rebuild estimators work best on houses that look like other houses. An older home with plaster, built-ins, a slate entry or an unusual footprint is harder to price, so the estimate carries more uncertainty. Extended replacement cost covers that uncertainty. The Insurance Information Institute describes it as paying a certain percentage over the limit to rebuild, 20 percent or more depending on the insurer.
Two cautions. First, the same source notes that guaranteed replacement cost, which can pay beyond the limit, may not be available on an older home. Second, extended replacement cost and ordinance or law cover different problems. Extended replacement helps when rebuilding the same house costs more than expected. Ordinance or law helps when the rules require you to rebuild it differently. An older house usually benefits from both.
- Get the base limit right first. Extended coverage is a cushion on top of a good number, not a substitute for one.
- Tell us about the details. Plaster, custom millwork, original hardwood, a slate or tile roof and masonry all belong in the estimate.
- Ask which of our markets offer it for your home. Availability and percentages vary by carrier and by house.
Which Endorsements Protect the Pipes You Can't See?
TL;DR: Water backup and sump overflow coverage handles water that comes up through drains, and service line coverage, where offered, helps with the buried line you are responsible for, but neither one is flood insurance.
The pipes in an older house that cause the biggest headaches are usually the ones you never see: the drain lines under the slab and the sewer lateral running out to the street. The Insurance Information Institute explains that the sewer lateral is owned and maintained by the property owner. If roots or age crack it, the repair is generally yours to arrange.
Water backup and sump overflow. The Illinois Department of Insurance lists sewer backup and sump pump failure among the typical homeowners exclusions, so it usually has to be added. Farmers lists water backup and sump overflow coverage as an optional coverage that helps with repair costs when water enters the house through a sewer or drain backup or a sump pump overflow. On an older home with a basement, especially a finished one, we treat it as close to essential and set the limit to fit what's down there.
Service line coverage. Some carriers offer an endorsement for damage to the buried utility lines that serve your house, which can include the sewer lateral. It is not offered everywhere, and the details vary. Ask us which of our markets offer it for your home.
Backup is not flood. Water coming up through a floor drain because the sewer backed up is a different event from surface water coming in from outside, and the two are insured differently. Flood coverage is its own policy. Our Illinois flood insurance guide explains where the lines fall and how to close the gap.
If you have never had the sewer line scoped, a camera inspection shows its material and condition. It won't change your policy on its own, but it tells you whether the oldest pipe on your property is a problem waiting to happen.
Which Updates and Documents Make an Older Home Easier to Insure?
TL;DR: Updated electrical, plumbing and heating systems widen your options most, and invoices, permits and inspection reports with the update years are what let a carrier give you credit for them.
The Insurance Information Institute suggests asking your agent what improvements would make a home more insurable, and names upgrading wiring, heating or plumbing among the examples. On an older house, the update itself matters, and so does being able to prove it.
- The update year for each system. Electrical panel, wiring, supply lines, drains, water heater, furnace or boiler, and the roof.
- Invoices and permits. A licensed contractor's invoice and a closed permit are the strongest proof a carrier can see.
- Inspection reports. A recent home inspection, an electrician's letter or a sewer camera report answers questions before they're asked.
- Photos. The panel label, the water heater data plate and the furnace tag take a minute to photograph and settle a lot of questions.
- Oil tank records. If a tank was removed or closed, keep the paperwork that shows it.
If you don't know when the wiring was last looked at, start there. The Consumer Product Safety Commission's guide to home wiring hazards says an inspection is overdue if the last one was 40 or more years ago, and describes arc fault circuit interrupters (AFCIs) as protection against arcing faults that can start fires, with installation by a qualified electrician.
Historic or landmark homes. If your house is a designated landmark or sits in a historic district, local rules may limit how you can repair or rebuild, sometimes requiring specific materials or methods. If that applies to you, tell us up front, because it can affect the settlement option, the ordinance or law limit and which carriers are a good fit.
Some of these updates may also earn a credit on the premium, depending on the carrier. Our complete guide to Illinois home insurance discounts covers those credits.
What If an Insurer Declines Your Older Home?
TL;DR: Ask what specific fix would make the house acceptable, let us check our other markets, and if standard carriers still say no, the Illinois FAIR Plan offers basic coverage as a backstop.
Being declined is frustrating, especially on a house you've cared for. It rarely means the house can't be insured. It usually means it doesn't fit one carrier's rules on one system.
- Ask for the reason, then ask what would change it. A panel update, an electrician's letter or proof that a tank was removed can turn a no into a yes.
- Let us check our markets. We quote with Farmers and the Farmers family of carriers, plus additional markets, and carriers draw their lines in different places.
- Keep your current policy in force until a replacement is bound, so there's never a gap.
If standard carriers still won't write the house, the Illinois FAIR Plan is the market of last resort. The Illinois Department of Insurance says you need three unsuccessful attempts to buy coverage from insurance companies, and the property must meet basic fire, loss prevention and safety standards. According to the FAIR Plan's Producer Summary (revised September 2024), its homeowners program covers owner-occupied 1 to 4 family properties with a maximum $750,000 dwelling limit, every property is surveyed, and it offers a modified HO 8 form on a repair cost basis alongside HO 2 and HO 3 forms on a replacement cost basis, with HO 3 written at 100 percent of replacement cost.
For eligibility and what the FAIR Plan leaves out, read What Is the Illinois FAIR Plan and Who Qualifies? If your current carrier has already sent a non-renewal, start with what to do after an Illinois home insurance non-renewal.
The Bottom Line
The best home insurance for an older Illinois house isn't a brand name. It's a policy built for the building: a settlement option that fits plaster and custom trim, ordinance or law coverage for the code upgrades a rebuild can trigger, extended replacement cost as a cushion on a hard-to-estimate house, and water backup protection for pipes you can't see.
The more you can show about your wiring, plumbing and heating, the more options you'll have. Gather the update years and the paperwork, then send us your declarations page or call or text (847) 223-4747, Monday through Friday, 8:30 AM to 5:00 PM Central. Our team will quote your house with Farmers and the Farmers family of carriers, plus additional markets, and walk you through the choices. You can also start on our home insurance page, read the Illinois home insurance guide, or request a home insurance quote.
Related Questions
Is it harder to insure an older home in Illinois?
It can be, mainly because of the age and type of the electrical, plumbing and heating systems. The Insurance Information Institute notes that old plumbing, electrical or heating systems can make a home harder to insure. Documented updates usually widen your options, and the Illinois FAIR Plan is the backstop if standard carriers decline.
What is ordinance or law coverage on a homeowners policy?
It is an endorsement that pays the extra cost of rebuilding to meet current building codes after a covered loss. The Illinois Department of Insurance lists ordinance or law among typical homeowners exclusions, and the NAIC describes the endorsement as paying for the extra expense to rebuild in compliance with building codes.
What is modified replacement cost?
A settlement option some carriers use on older homes. According to the Insurance Information Institute, it pays for repairs using standard building materials and construction techniques in use today, so damaged plaster or custom trim may be replaced with modern equivalents rather than matched to the original.
Will insurers cover a house with knob-and-tube wiring?
Some will and some won't, and many ask for an electrician's inspection or an update first. It is one of the materials many insurers ask about. Ask the carrier what it would need to see, and keep invoices and permits for any electrical work so you can prove it.
Does homeowners insurance cover a broken sewer line on an older house?
Usually not on its own. The Insurance Information Institute says the sewer lateral is owned and maintained by the property owner, and the Illinois Department of Insurance lists sewer backup among typical exclusions. Water backup coverage and, where offered, service line coverage can be added by endorsement.
Last reviewed October 2026 by Joe Lapera, Licensed Illinois Insurance Agent (IL Lic #100722394). Figures verified against the sources linked above on that date.