Homeowners Insurance of New Construction

Insuring New Construction Home

Insuring a new construction home is a vital step for homeowners looking to protect their investment. New homes are not immune to unexpected events, and insurance provides financial security in case of damage or loss.

Most homeowner's insurance policies for new construction homes typically cover a range of scenarios, including structural damage from fires, storms, accidents, and theft or vandalism. Additionally, they often include liability coverage if someone is injured on the property. These policies also ensure that homeowners can rebuild or repair their new homes without bearing the entire financial burden.

How Much Does Home Insurance Cost for New Constructions?

Home insurance costs for new constructions are typically lower compared to older homes. Newer homes benefit from modern construction materials, updated electrical and plumbing systems, and new appliances, making them less susceptible to risks like electrical fires or storm damage.

On average, insuring a new home can be around 13% cheaper than a 10-year-old home and 32% cheaper than a 20-year-old home. Insurance rates are primarily determined by the likelihood of a claim and the cost of potential repairs. Since new homes are associated with fewer claims and lower repair expenses, insurance companies often offer more affordable coverage for them.

Average Homeowners’ Insurance Rates by Home Age

New construction homes typically have lower homeowners’ insurance rates than older homes. This is because insurance companies perceive them as having lower risk profiles due to their new and well-maintained features, from the foundation to the roof. New homes are less prone to issues commonly found in older properties, such as faulty wiring and deteriorating roofs, which can lead to insurance claims. As a result, insurers charge lower premiums for new homes and anticipate fewer property claims, apart from weather-related damage.

New Construction Home Insurance Rates by Company

When insuring new construction homes in the United States, Nationwide and Progressive stand out as the most budget-friendly options, offering affordable annual premiums. On the flip side, Travelers tends to be pricier, making it the choice for those seeking more comprehensive coverage but at a higher cost.

Builders Risk Insurance: Coverage for Homes under Construction

When building a new home, it's essential to consider protecting your property during construction. Standard homeowners’ insurance may not cover damages during this phase, so it's wise to consult your insurance agent for clarification. Construction sites can be vulnerable to risks like vandalism, theft, and accidental damage, prompting insurers to recommend adding builders' risk insurance as an add-on for coverage during construction or major remodeling.

However, builders' risk policies provide less coverage than regular homeowners insurance and exclude liability protection, personal property, additional living expenses, and medical payments to others. Once your new house is finished, update your insurance to a standard policy based on the home's final replacement cost.

New Construction Home Discounts

Most insurers offer discounts for homeowners with new or renovated properties. These discounts include savings for newly constructed homes, updated roofs, and home renovations like plumbing and electrical upgrades.

New Home Construction Discount: Homes built within the last decade are often considered structurally sound, with new plumbing, wiring, and roofs resulting in a reduced risk of damage. Homeowners of recently constructed homes can typically enjoy substantial premium discounts.

Roofing Discount: Insurance companies factor in the age and material of a home's roof when determining rates. Homeowners who replace their roofs can benefit from discounts, making it advantageous to inform their insurance provider after such upgrades.

Home Renovation Discount: Upgrading key components like plumbing and electrical systems can decrease the risk of water damage or fires. Insurance companies recognize these improvements, often offering discounts to homeowners who invest in renovating these crucial elements.

The Best Ways to Save on Home Insurance

Review Policies:

Check for new policies regularly to avoid overpaying. Don't hesitate to switch to a cheaper insurance provider while ensuring coverage quality.

Bundle Policies:

Bundle home and auto insurance with the same company for an average savings of $268 per year.

Explore Discounts:

Many companies offer various discounts that can accumulate over time. Common discounts include multi-policy, new home construction, paperless payments, claims-free history, senior homeowners, roof upgrades, home security systems, and smoke-free homes.

Consider Different Payment Methods:

Opt for paperless billing, pay in full, electronic fund transfer (EFT), or automatic payments for potential discounts.

Higher Deductible:

If you are comfortable covering a larger amount in case of a loss, choose a higher deductible. Increasing the deductible can lead to lower premiums, which are inversely proportional.

Understand How Claims Work

Understanding how claims work is essential when dealing with insurance. It's important to remember that not every minor incident warrants filing a claim, as it can affect your future coverage options. Insurance companies use a national database called the Comprehensive Loss Underwriting Exchange (CLUE) to track property claims, which they can access to assess your risk. Typically, it's advisable to file a claim only when the repair or replacement costs surpass your deductible, ensuring you get the most value from your policy. Understanding when to file a homeowners’ insurance claim is key to making the most of your coverage.

Summary

Insuring a new construction home is crucial for safeguarding your investment against unexpected events. Most insurance policies for new homes cover structural damage from fires, storms, theft, and liability for injuries on the property. Insurance costs for new homes are generally lower due to their modern features, resulting in fewer claims and lower repair expenses.

Builders' risk insurance is essential during construction, covering risks like theft and damage, but it offers less coverage than standard policies. Discounts are often available for new homes, roofing upgrades, and home renovations. To save on insurance, compare policies, bundle them, explore discounts, consider different payment methods, and understand when to file a claim wisely.

How to File a Home Insurance Claim for a New Construction Home with Way.com

Filing a home insurance claim for your new construction home with Way.com is a very simple process. All you need to do is visit our app or website, select the type of claim you need, and follow the easy steps to file it.

If you have any questions or need assistance, our local agents are here to help. Plus, with Way.com, you can potentially save up to $900 annually on your homeowners’ insurance. So, protect your valuable abode easily and save money by choosing Way.com for your new home insurance needs.