What Home Age Actually Tells Us About Claims — And What It Doesn’t
After 20 years in homeowner claims, I’ve heard the same assumption so many times it’s practically folklore: older homes cost more to insure because repairs cost more. That’s not entirely wrong, but the real story is more specific — and more useful — than that.
The distinction matters because America’s housing stock is only getting older. According to U.S. Census data analyzed by the National Association of Home Builders, nearly half (48%) of owner-occupied homes were built before 1980. With more homeowners living in older houses, it’s worth taking a closer look at what home age actually tells us about claims.
Here’s what our claims data actually shows.
For the typical claim, home age barely matters. Looking at non-catastrophe claims that closed with a payment last year, the median paid loss hovered around $9,000 regardless of when the house was built. A burst water line, wind-damaged siding, a contained kitchen fire — those everyday losses cost roughly the same whether the home was built last decade or a century ago. What changes with age isn’t the typical loss. It’s the worst ones.
Homes built in 1940 or earlier show average paid losses roughly twice as high as homes from the 1980s and 90s. That gap isn’t because old homes produce more claims — it’s because when they have a bad loss, it tends to be very bad. Pre-1940 homes in our book are about twice as likely to generate a six-figure loss as newer construction. And even though these older homes don’t dominate our claim count, they represent a disproportionately large share of total dollars paid out. The reason the average loss looks so much higher than the typical claim is that a small number of very expensive losses pull the number up. Most claims are routine. A handful are not. Old homes have more of the handful.
Why This Matters for The Agent Conversation
The practical implication for agents and brokers is in how you set expectations with clients who own older homes — particularly pre-1940 stock. The premium customers are paying isn’t primarily covering the routine claim. It’s covering the exposure that lives in those severe, infrequent events: the significant fire loss, the water event that cascades through plaster walls and original hardwood and a basement full of mechanical systems that haven’t been touched in decades.
Clients sometimes push back on pricing for a home they consider well-maintained. It’s a fair instinct — they’ve put money into the kitchen, the bathrooms, the roof. But the age of the underlying structure is a separate conversation from the condition of the visible surfaces. Method of construction/construction materials also plays a big role — balloon construction, insulation type, wiring, asbestos, lead, etc., all come into play when a big loss happens, and these make the big losses worse — but these are the things you can’t see. Agents who understand this, and can explain it plainly, are the ones having a more honest conversation about what insurance is actually for.
A Few Honest Caveats
As with any claims analysis, scope matters. The findings presented here are limited to severity, not frequency. They tell us how losses differ when claims occur, but not whether homes of different ages are more or less likely to generate claims. The analysis is also based on a single Northeast-weighted, non-catastrophe, closed-year book. We have not isolated other variables correlated with home age, such as location, insured value, coverage and deductible structure, or square footage. As a result, some of what appears to be an age effect may be attributable to those factors.
What’s driving the severity in older homes — original roofing systems, aging plumbing, outdated electrical, asbestos, and lead — is the logical next question and one worth studying. This analysis shows where the dollars concentrate. Explaining exactly why, at a structural level, is a separate exercise, though after 20 years I’ll admit the likely explanations aren’t hard to guess.
The Bottom Line
Older housing stock isn’t a uniform claims problem. It’s a tail problem — meaning the risk lives in a small number of large, expensive events rather than in the everyday claim. When old homes have losses, they tend to be expensive, and those losses concentrate in ways that matter for how we price, reserve, and talk to clients about coverage.
For carriers and agents, that distinction matters. It helps explain why premiums, underwriting decisions, and coverage recommendations can differ even when two homes appear equally well maintained. The data suggests that home age is less about the cost of the typical claim and more about the potential for unusually expensive outcomes. Recognizing that distinction leads to better pricing decisions, better client conversations and a clearer understanding of the risk being insured.
Leeds is chief claims officer at Plymouth Rock Home Assurance Corporation. He joined Plymouth Rock in 2021 after serving in a variety of roles within Liberty Mutual where he began his insurance career in 2004. Before that, Leeds was a captain in the United States Army.