Why Do You Need Home Insurance for New Builds?

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Buying your dream house isn’t easy at all! Besides looking for the best interiors, you also have to choose the best home insurance for new builds. But is it necessary? Or is it just a formality? Well, mortgage lenders ask you to have home insurance for newly constructed homes, and they do it for the right reasons. 

The best time to look for home insurance is when you are shopping for your new house. If you are sure about your investment, you must decide on good insurance that covers your crucial necessities and protects you from household damages. The most amazing part about getting insurance for a newly constructed home is that you have a pay a lot less for a new home than an old one. 

Being cheaper to insure, new build insurance costs 53% less than a 10-year-old house. This is the difference we’re talking about, and that’s why you should always buy a new home rather than an old one. Usually, old places require more catering and are more prone to damage. To avoid extra expenses, buy a new home, and here’s all you need to know about buying home insurance for new builds. 

Do You Need House Insurance on a New Build by Law?

No, by law, you do not need to buy any home insurance. However, mortgage lenders will not finance your purchase before buying home insurance. Since the insurance covers the money for repairments and rebuilding a home, it protects the investment of mortgage lenders. This way, if a house gets on fire, or gets damaged by a lightning storm or anything like that, the mortgage lender doesn’t have to face any loss to the property that s/he made. 

Therefore, it is way your mortgage lender is securing and protecting its investment in maintaining the property or land before you arrived. Also, if somehow you decide to leave the house in a year or two, the mortgage lender doesn’t have to put its own money into reconstructing the damages. Your home insurance will help you in leaving the house in a good state so that the mortgage lender doesn’t have to worry about anything. It is more like protection, for your own good.

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Is Home Insurance More Expensive on New Builds?

Why Do You Need Home Insurance for New Builds?

When insurance companies calculate insurance quotes, they do consider ‘when the home was built’ among all the factors. So, it might not be a big factor, but it is there. Usually, the average cost of home insurance for a new build is around $80/month.

Insurance CompanyNew Builds10-Year-Old Home
1Progressive$533$1,355
2Nationwide$693$1,236
3USAA$706$1,231
4Amica$772$1,089
5State Farm$885$1,356
6Travelers$929$1,444
7Allstate$1,033$1,594
8Farmers$1,093$1,455
9American Family$1,422$2,261

The table above clearly shows the home insurances prices of different companies all over the US. The least expensive one among all of them is Progressive, with the cost of only $533 per year. It means you only have to pay around $40-$50 per month. That’s why it is always recommended to cross-check different insurances and see which one suits you the best. 

What are the Different Types of Insurance Coverage for New Builds?

Why Do You Need Home Insurance for New Builds?

Your location determines everything. The more your area is prone to damage and theft, the more you are going to pay for your home insurance. If your area comes under the danger of flooding, landslides, earthquakes, and other natural calamities, then it will only make your insurance more expensive. 

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When you are going through multiple coverages, you must know which one covers what and whatnot. Here are the different coverages you must know of before landing on home insurance for a new build-

  • Premises Liability

Suppose you and your friend are walking on your property that is currently under construction, and your friend falls and gets hurt. In this situation, body injuries and damages are covered under Premises Liability. 

  • Structure Coverage

Structure coverage helps you from damage to your property or damage to anything that was on your property before. It will include vandalism, fire, cyclones, heavy storms, theft, and more.  

  • Building Materials Coverage

If any of your building materials get damaged or stolen during the construction process, then they will be covered under Building Materials Coverage. It also includes items that were on your property to be installed and stolen before installation. 

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Home Insurance is An Overall Protection

A person invests all their life savings in buying a new home for its family. When you spend thousands of dollars buying a house, why don’t you give a little attention to home insurance? After all, it only protects you from various damages and thefts. You can go through numerous home insurances for your newly built home, and you must. It can be super helpful at times.

If this article was informative to you, then comment below. You can also tell us about your other doubts and queries.

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