Insuring an Older Richmond Home: HO-3, the Market Value Form and What to Do If a Carrier Says No

Published October 31, 2026 | Written by the Mission Realty Team.

If the home you want is old, the quote you receive may be one of two different products. A standard HO-3 policy is built around the cost to rebuild. A market value (MV) form, which the Virginia State Corporation Commission (SCC) says is designed for older homes, can carry lower limits and pay for repairs with commonly used materials. Ask which form is on the quote before you compare prices.

This guide uses the SCC Bureau of Insurance’s Virginia homeowners insurance consumer guide, a National Association of Insurance Commissioners page on replacement cost and actual cash value, and Fannie Mae’s property insurance requirements. We read all three on October 29, 2026. It contains no premium figures. For how premiums are set, see our post on how homeowners insurance is priced in Richmond VA, and for a line-by-line read of a quote, see our hub post, Reading a Homeowners Insurance Quote Before You Close in Richmond.

What the SCC says an MV form is

The SCC lists the market value form among the standard policy types sold in Virginia. It describes the MV form as designed for older homes, usually built in a way that is not economically feasible to duplicate after a loss. The MV form lets the owner carry lower limits, such as the market value of the home instead of the 80% of replacement cost used for newer homes. The policy contemplates returning the property to serviceable condition using commonly used materials, not necessarily materials of the same kind and quality as the original.

In plain terms, an MV form is built around what the house is worth, while an HO-3 is built around what it would cost to rebuild. The SCC’s guide does not compare their prices, and neither do we. Ask the agent what the claim payment would look like on each form for the same loss, such as a damaged plaster wall or an original window.

The standard route: HO-3 and the 80% line

The SCC describes the HO-3 Special Form as usually covering the building against all perils except those excluded, such as flood and earthquake. It advises a dwelling limit of at least 80% of replacement cost, which it defines as the money needed to rebuild with current materials and labor. Below that line, the SCC says, the insurer owes only the larger of the actual cash value of the loss or a prorated share based on the insurance you bought compared with the insurance you should have bought.

For an older house, replacement cost can differ sharply from what you paid, because the price you pay includes land and market conditions while rebuilding cost reflects labor and materials. The SCC suggests asking whether the company offers an inflation guard endorsement and whether it will guarantee replacement cost coverage for the dwelling. Ask for a written replacement cost estimate on any older home you are considering.

Actual cash value, depreciation and an older house

Older components are where actual cash value (ACV) bites. The NAIC page explains that ACV pays the depreciated value of a repair or replacement, based on the property’s condition when damaged, what a new item would cost and how long such an item typically lasts. Replacement cost pays without subtracting depreciation. The NAIC’s own example has two households with $15,000 in roof damage and a $1,000 deductible: the one with replacement cost coverage receives $14,000, and the one with ACV coverage and $10,000 of depreciation receives $4,000. That is an illustration, not a Richmond average.

The SCC adds that Virginia dwelling claims are often paid first at ACV, with the remainder paid after repairs if you tell the insurer within 6 months of its last ACV payment that you intend to repair or replace. Our post on what a roof’s age does to a Richmond sale covers the roof side, and the post on old electrical panels covers another item underwriters ask about.

Building ordinance or law coverage

The SCC says companies are required by law to offer building ordinance or law coverage, which may cost extra. It pays when a building damaged by a covered peril must be repaired or rebuilt in a more costly way because the original construction does not meet current building codes. For a house built long before current codes, that gap can matter after a covered loss. The SCC says to ask about it, and about water and sewer backup coverage, which companies must also offer. Get both answers in writing before you commit to the purchase.

What your lender may require

Lenders set their own rules, so ask your loan officer for the list in writing. Fannie Mae’s Selling Guide, which governs loans it buys, requires property coverage that includes fire, windstorm (including named storms), hail and other perils, on a replacement cost basis with roofs as the exception. It caps the deductible at 5% of the property insurance coverage amount, including separate wind or hail deductibles. We did not find a page in Fannie Mae’s guide or the SCC’s guide that says whether an MV form satisfies those rules, so confirm it with the lender before you pay for a binder. FHA, VA and Virginia Housing loans have their own insurance rules, which we have not read for this post.

Our featured lenders can tell you what they will accept, and our buyer services explain how we line up insurance quotes with your closing timeline.

If a carrier says no

The SCC advises asking for the specific reason you are turned down and then trying other companies, since underwriting rules differ. Virginia has a competitive rating law, so prices differ between companies. If a home needs repairs and you cannot buy a usual package policy, you may be able to buy two separate policies, one for the home and personal property and one for liability. The SCC says the Virginia Property Insurance Association offers limited coverage as a last resort: fire, lightning, hail, explosion, smoke and a few other perils, with a broader policy available for eligible properties. Premiums are generally higher and coverage more limited than private policies.

Insurers also review the size and frequency of losses, which is why our post on the CLUE report and a buyer’s insurer is worth reading before you go under contract.

A checklist before you make an offer on an older home

Ask for quotes on both a named peril and an open perils policy, since the SCC says the extra premium for open perils is often relatively small. Confirm whether each quote is an HO-3 or an MV form. Ask for the dwelling limit and the replacement cost basis, the wind and hail deductible, the ordinance or law offer and the water backup offer, all in writing. The wind and hail deductible works as a percentage of the dwelling limit on many policies, as the hub post explains.

For older neighborhoods, our community pages for The Fan, Church Hill and Oregon Hill describe historic housing, and you can browse listings in our property search.

Frequently asked questions