Homeowners insurance for new construction

Newly constructed homes typically have cheaper home insurance rates thanks to their updated construction materials and building techniques that make them better able to withstand damage — meaning you’re less likely to file a claim.

Kara McGinleyPat Howard 1600

By

Kara McGinley

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

&Pat Howard

Pat Howard

Managing Editor & Licensed Home Insurance Expert

Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

Updated|4 min read

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Homeowners insurance for new construction, or new builds, is typically more affordable than homeowners insurance for older property types. This is because newly constructed homes are made with updated construction materials, wiring, household systems, and more — which means you're less likely to file a claim. 

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How much does homeowners insurance cost for new construction?

While the average cost of homeowners insurance in the U.S. is $1,899 per year, your rates are generally going to be cheaper if you're insuring a recently built home. In fact, a new home costs roughly 13% less to insure than a 10-year-old home, and is 32% cheaper to insure than a 20-year-old home.

As the chart and table below show, the newer the home, the lower your rates will be.

Age of home

Average annual cost

Average monthly cost

New home

$1,200

$100

10 years old

$1,358

$113

20 years old

$1,724

$144

30 years old

$1,776

$148

50 years old

$1,797

$150

Because newer homes are built with up-to-date construction materials, new electrical and plumbing work, and brand new appliances, they're less likely to suffer an electrical fire or structural damage after a storm.

Your home insurance rates are primarily based on how likely you are to file a claim, as well as the estimated cost of repairs should the home incur a loss. Insurance companies generally correlate new homes with less frequent claims and lower repair costs, so they'll often charge significantly less for coverage.

→ Learn more about the factors that affect your homeowners insurance premiums

Average home insurance rates by company and home age

Looking at the top homeowners insurance companies in the U.S., we calculated each company's average annual premium for various home ages, including new construction. National General and Progressive offers the most affordable home insurance rates for new construction homes, while Travelers has the most expensive rates.

Insurance company

New home

10 years old

20 years old

30 years old

50 years old

AAA

$1,118

$1,651

$1,790

$1,930

$2,076

AIG

$1,009

$1,227

$1,291

$1,266

$1,303

Allstate

$947

$1,580

$1,726

$1,717

$1,681

American Family

$1,075

$1,658

$1,768

$1,799

$1,823

Amica

$1,739

$2,385

$2,464

$2,473

$2,497

ASI Progressive

$659

$1,354

$1,796

$1,884

$1,850

Auto-Owners Insurance

$942

$1,301

$1,462

$1,561

$1,511

Chubb

$1,489

$1,932

$1,985

$1,964

$1,854

Erie

$709

$1,179

$1,492

$1,465

$1,589

Farmers

$1,361

$1,937

$2,177

$2,169

$2,156

Narragansett Bay

$982

$1,228

$1,323

$1,426

$1,446

National General

$555

$782

$919

$1,007

$1,042

Nationwide

$782

$1,402

$1,995

$2,109

$2,045

Pure Insurance

$1,469

$1,827

$1,958

$2,079

$2,110

State Farm

$1,143

$1,727

$1,931

$1,935

$1,939

The Hartford

$1,479

$1,886

$2,259

$2,495

$2,460

Travelers

$2,472

$4,063

$5,512

$6,138

$5,989

Universal Property

$1,396

$1,500

$1,555

$1,659

$1,704

UPC Insurance

$1,059

$1,368

$1,649

$1,714

$1,716

USAA

$836

$1,251

$1,501

$1,547

$1,566

Best homeowners insurance companies for new construction homes

Here are our picks for the best homeowners insurance companies for new construction in 2022.

To come up with our top picks, our team of licensed home insurance experts compared average annual rates from several companies for homes that are new builds, 10 years old, 20 years old, 30 years old, and 50 years old. In addition to cost, we also looked at policy options to see which company offered the best coverage options for new homes.

You can check out our full methodology below.

Progressive: Best new construction discount

Progressive offers the biggest home insurance savings for new builds, with premiums on newly constructed homes costing a whopping 63% less than premiums for a 20-year-old home.

Average annual premiums by home age:

  • New builds: $659

  • 10 years old: $1,354

  • 20 years old: $1,796

Availability: All 50 states

How to get a quote: Online through Policygenius or Progressive

Get quotes

→ Read our full Progressive homeowners insurance review

National General: Best for cheap rates

National General

National General logo

National General offers the cheapest home insurance rates for new homes, with an average annual premium of $555 for a new build with $300,000 in dwelling coverage.

Average annual premiums by home age:

  • New builds: $555

  • 10 years old: $782

  • 20 years old: $919

Availability: All 50 states

How to get a quote: Online through Policygenius or National General

Get quotes

Hippo: Best coverage options for new homes

Hippo

Hippo logo

Hippos budget-friendly home insurance policies offer the best protection for new builds. From its enhanced coverage for appliances and electronics to its smart home program and discounts, Hippo policies are tailored for the modern home.

Average annual premiums by home age:

  • New builds: $833

  • 10 years old: $2,202

  • 20 years old: $2,149

Availability: 38 states

How to get a quote: Online through Policygenius or Hippo

Get quotes

→ Read our full Hippo homeowners insurance review

Shop homeowners insurance for new builds

We don't sell your information to third parties.

How does homeowners insurance cover new construction homes?

A standard homeowners insurance company will cover your new home with the same six basic coverages offered to other homes — the main difference is that your homeowners insurance rates may be cheaper, since you’re less likely to file a claim. You may even be offered a discount on your premiums for having a newly built home. 

Below is a look at what home insurance covers.

  • Dwelling coverage: Pays to rebuild the structure of your home and attached structures —  like a garage — if they’re damaged by a covered peril, including fire, wind, or hail.

  • Other structures coverage: Pays to repair other structures on your property, like a shed or detached garage, if they’re damaged by a covered peril. 

  • Personal property coverage: Pays to repair or replace your belongings if they’re damaged or stolen.

  • Loss of use coverage: Pays for additional living expenses — like hotel stays, restaurant meals, and pet boarding fees — if you need to live elsewhere while your home is being rebuilt. 

  • Medical payments coverage: Pays for more minor medical expenses — like an ambulance ride or  X-rays — if someone is injured on your property, regardless of who was at fault.  

  • Liability coverage: Pays for extensive medical expenses or legal fees if you’re found legally responsible for someone else’s injury or damaged property. 

→ Learn about coverage needs for different types of property

Do I need home insurance while the new build is under construction?

A standard homeowners insurance policy is designed for homes that are fully built and ready to be lived  in. If you’re looking for coverage for a home that’s currently being built or undergoing a renovation that requires short-term construction, then you may need to purchase one of these coverage types instead.

Builders risk insurance

When building a new home, you may be responsible for purchasing builders risk insurance to protect the insured property from weather-related damage and vandalism. Builders risk insurance only includes coverage for the structure of the home that’s being built and the construction materials.

Depending on your current homeowners insurance company, you may be able to add builders risk coverage to your current policy for an additional fee. If your insurer doesn’t offer it, you’ll need to purchase a separate standalone builders risk insurance policy. 

The contractor may be responsible for purchasing builders risk insurance

Depending on the construction company and your contract, the construction company may be required to purchase builders risk insurance — not you. Make sure to check your contract to see if the contractors already have builders risk insurance. If they don’t, it’ll be on you to purchase it. 

Dwelling under construction coverage

A standard homeowners policy likely won’t cover burglary or damage to your home while it’s under construction. Check with your insurance company to learn if you need to add a dwelling under construction endorsement to your home policy. 

Dwelling under construction coverage fills the temporary gap in coverage while your home is undergoing renovations or updates. This endorsement is meant for short-term projects, like smaller renovations, not long-term construction. 

3 home insurance discounts for new construction

Most insurers offer multiple ways for homeowners to save on coverage, including home insurance credits and discounts for new or renovated properties, as well as homes with newer roofs.

Here are three common home insurance discounts for new construction or recently remodeled homes.

  1. New home construction discount: A newly constructed home is more structurally sound, it has new plumbing and wiring, a finished basement, a new roof, and is overall faces less risk of being damaged. If your home was built in the last 10 years, you'll likely get a sizable premium discount.

  2. Roofing discounts: Insurance companies also consider your roof's age and material it's made of to set your rates. If you had your roof replaced, make sure to reach out to your insurance company to reap the benefits.

  3. Home renovation discount: Certain home renovations, like replacing your home's plumbing or electrical work, reduce your home's chances of water damage or electrical fires. For that reason, some insurance companies provide discounts if you update these parts of your home.

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Frequently asked questions

Is homeowners insurance cheaper on a new home?

Yes, a new home costs around 32% less to insure than a 20-year-old home.

What is the difference between builders risk and homeowners insurance?

Builders risk insurance covers the property while it's under construction, since it's exposed to different risks than a finished, fully occupied home.

Do I need home insurance on a new build?

Yes, once your home is fully built and you're ready to move in, you'll need to purchase a standard homeowners insurance policy for the residence. Your homeowners insurance should technically kick in once the construction is complete, at which point your builders risk policy would no longer be in effect.

Methodology

To find the best homeowners insurance for new home construction in 2022, we looked at average annual premiums from the 50 largest insurance providers in the U.S. by market share. Our rate data was provided by Quadrant Information Services for ZIP codes in all 50 states plus Washington, D.C. for a sample 40-year-old female homeowner with the following coverage amounts:

  • $300,000 in dwelling coverage

  • $30,000 in other structures coverage

  • $150,000 in personal property coverage

  • $60,000 in loss of use coverage

  • $300,000 in liability coverage

  • $1,000 in medical payments coverage

  • $1,000 deductible

We then took used this profile to calculate average rates for a new home, 10-year-old home, 20-year-old home, 30-year-old home, and a 50-year-old home.

Authors

Senior Editor & Licensed Home Insurance Expert

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

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Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

Managing Editor & Licensed Home Insurance Expert

Pat Howard

Managing Editor & Licensed Home Insurance Expert

gray twitter icon linkgray linkedin icon link

Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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