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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
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More than 1.6 million new housing projects were initiated between July 2021 and July 2022. If you’re part of this new home boom and just built a property, you may be preparing to insure it. Bankrate’s experts can help walk you through homeowners insurance for new construction, the coverage types you may want, the average cost of a policy and the types of discounts available.
Luckily, homeowners insurance for new construction can be cheaper than average, depending on how the home was built. Newer homes typically have fewer problems and certain building features can score you discounts. For instance, if you used fire-resistant building materials or installed a burglar alarm, you may be able to get a discount on your premium.
When looking for a home to buy, the cost of home insurance is one variable you may want to consider. In general, the newer the house, the cheaper the insurance. The less time a structure has been around, the longer it should take before anything goes wrong with it. At least, that’s part of the thinking behind new and older home insurance rate differences. The age of your home can also influence which insurance endorsements might be worth adding to your policy.
Determining which new build home insurance endorsements are best for you will depend on your locale, home type, belongings and what standard coverage your home insurance already includes. For example, many people have personal property like jewelry, art and electronics with values that exceed what their standard policy will cover. A scheduled personal property endorsement can help fill in the gap and cover your valuable possessions at higher limits. It’s also important to consider whether flood, earthquake or other weather and disaster damage endorsements are a good fit for your location.
There are many factors and considerations that go into building a new home on your land. For starters, you may need to buy builder’s risk insurance before the construction gets underway. This coverage can protect against damages to the materials and features of the construction project while it is being built. If fire or weather damages the materials or the structure before the building is finished, for example, builder’s risk insurance could help cover the losses.
A standard home insurance policy can go a long way, but it may not always be the right protection tool. Homes under construction or serious renovation may benefit from builder’s risk insurance because it is specialized property insurance designed precisely for these situations. With this home insurance construction endorsement, the building is covered while being worked on, including the building materials being used.
The risks a completed home and a home under construction face are not always the same. These differences are one reason that builders’ risk insurance can be helpful. This specialized insurance covers a wide range of perils:
Still, after construction is complete — if not before — you’ll likely benefit from a standard home insurance policy. Builder’s risk insurance is excellent for unfinished home builds, but its job is complete when the house is. Afterward, keeping your property financially protected will involve a traditional homeowner’s insurance policy, which can protect both the structure and the contents of your home.
Home insurance, like all insurance, is priced based on financial risk. The less likely a home is to need repairs or other alterations and fixes after covered damage, the cheaper it is to insure. Additionally, the less expensive estimated repairs are, the cheaper the policy is. These two variables — the estimated frequency of claims and home repair or replacement cost — play a prominent role in determining insurance premiums. As a result, new building home insurance is often seen as less financially risky by insurance companies. For example, consider the cost of replacing new mass-produced materials instead of antiquated materials that are no longer as commonly available. The older materials will generally cost more.
The table below highlights some of the top insurance companies and their average rates for a policy with $250,000 in dwelling coverage, according to Bankrate’s study of average home premiums. Personal rates will vary between customers, companies and circumstances. Consider speaking with a licensed agent about quotes to see what your rates could be.
It’s not uncommon for insurance companies to offer discounts on policies for newly constructed homes. As mentioned, these newer structures are often seen as less risky by the provider, and some insurance providers use discounts to incentivize building materials that can reduce the risk of the homeowner filing a claim. If you’re a first-time homebuyer, you may want to consider these home insurance discounts when deciding whether or not to purchase a new construction.
Discounts vary between companies and some are dependent on the specific materials used in construction. Below are some other common discounts that might make sense for a new home.
Up to a limit, standard home insurance policies generally cover renovations. The specifics depend on the policy and certain renovations may void the policy or leave your expanded or improved home underinsured. It may also be vital to make sure that any contractors involved have proper insurance in case they get injured, something gets damaged or a fault occurs in the work.
The best home insurance policy and company will vary between individuals and circumstances. Rates vary significantly between people and companies, and providers often specialize in certain coverage areas to gain distinction from each other. For this reason, shopping around for providers is one of the best ways to find the best home insurance for you.
While homeowners’ insurance can often cover some renovations, it is not the right type of policy for a house being built. Insurers are hesitant to issue standard home insurance policies to homes that are vacant and still being constructed. Instead, builder’s risk insurance is often recommended.
While your contractors may need certain types of insurance, the owner insures the property being built. In these situations, obtaining a homeowners insurance new construction endorsement is the standard approach. Builder’s risk coverage is designed and used for this purpose.
Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.
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