Ready to embark on a new build project? Find out how much you can save on insurance by dwelling in the newest house in the neighborhood.
Whether you’re a first-time homebuyer or a seasoned homeowner looking to upgrade to a newer home, your mortgage lender will require you to get home insurance for the new property. Homeowners insurance comprises some crucial coverages that will protect the dwelling’s structure, your personal property, liability and more.
If you’re in the process of closing on the property, now is the time to start shopping around to insure your investment — even if it’s still under construction. The good news is that insurance companies are partial to newly constructed homes, so they’re cheaper to insure than an older home.
Consult our guide to finding insurance for a brand new house, and the best ways to save even more on your insurance rate.
The newer the home, the cheaper it will be to insure. The price difference in insuring a new construction versus a 10-year-old house is 53%. Rates climb incrementally as the home ages beyond 30 years.
Compared to a home built in 1990, you can save more than $700 a year in insurance costs by opting for a new build. Learn more about our rate-gathering methodology.
|Age of Home||Average Annual Premium||Monthly Premium||% Difference|
|10 Years Old||$1,478||$123||+53%|
|20 Years Old||$1,670||$139||+13%|
|30 Years Old||$1,694||$141||+1%|
|40 Years Old||$1,698||$142||+0.23%|
|50 Years Old||$1,700||$142||+0.12%|
If you’re looking to buy a new construction home, you’re in luck; insurance companies favor covering new homes because everything is new — from foundation to roof — and thus, comes with lower risk profiles. Insurers charge lower premiums for newly built homes since these properties are much less likely to suffer from issues that tend to afflict older homes; things like faulty wiring and crumbling roofs are more likely to cause damage that would warrant insurance involvement. Apart from weather-related claims, insurance companies don’t anticipate the owner of a brand new home will need to file a property claim anytime soon.
When your home was built is a relatively small piece of the pie when companies calculate insurance quotes, but it remains a factor nonetheless. On average, you can expect to pay $80 per month to insure a new build.
See more in the table below to see a breakdown of rates by insurance company and the age of the home.
|Insurance Company||New Construction||10 Years Old||20 Years Old||30 Years Old||40 Years Old||50 Years Old|
The cheapest company for a new build home was Progressive, with an average monthly payment of just $44 — $36 less than the national average. Consider Nationwide and USAA as alternatives — these insurance companies charge approximately $14 more per month than does Progressive.
Find out who the cheapest insurer is for your new construction by entering your ZIP code below to get quotes and compare them side-by-side.
If your new abode is being freshly built for you, there’s an additional consideration to be mindful of — protecting your property while it’s under construction. A standard homeowners insurance policy may exclude coverage for damages incurred while the home is being built. Consult your insurance agent to verify whether or not your policy offers coverage under these circumstances.
Construction sites can be prone to perils like vandalism and theft, so your insurance company could require that you add builders risk insurance (also known as course of construction insurance) as a policy add-on to cover your dwelling under construction or if you’re embarking on a major construction project or remodel.
Builders risk provides protection for:
A builders risk policy offers much less coverage than a typical homeowners policy as it’s intended to be temporary. It doesnotinclude coverage for:
One of the best ways to avoid overpaying is to shop for a new policy regularly, and don't be afraid to make the switch if another company is offering a cheaper deal. Even with discounts, there's a chance you can get a better rate elsewhere as some insurers are just more expensive than others. See below for more expert tips on how to save.
A bundling discount is one of the more common discounts that can be found at most insurance companies. Already have auto insurance? Look into bundling home insurance and car insurance with the same insurer to save about $268 per year, on average.
The number of discounts varies from company to company, and sometimes it may be built into your rate when you shop around for quotes. While home insurance discounts tend to be quite small, they can add up. Here are some common discounts for homeowners insurance:
As long as you’re comfortable paying a higher deductible (for homeowners insurance, this could be well into thousands of dollars) in the event of a covered loss, this is an easy way to lower your rate. Premiums and deductibles work inversely — raising one will lower the other, and vice versa.
Not every incident is worth filing a claim for, and it could be harder to find an insurance company willing to provide coverage if you have a history of losses. All property claims are tracked in a national database called the Comprehensive Loss Underwriting Exchange (CLUE) that insurance companies can access. In general, you should file a claim if repair or replacement costs exceed the deductible you’ll pay. Learn more about when to file a homeowners insurance claim.
Ready to see how much you can save? Use our comparison tool to compare rates from local and national homeowners insurance companies side-by-side.