Home Insurance for New Construction: Everything You Need to Know

There's nothing like the smell of fresh lumber and paint. Buying a new construction home is exciting, and the good news extends to your insurance bill.

Because everything is brand new and up to code, new homes are the safest bet for insurers. Here is how to maximize your savings.

Why It is Cheaper

Insurers fear old things: rusty pipes, 20-year-old roofs, and knob-and-tube wiring.

Builder's Risk vs. Homeowners

If you are buying from a large developer (e.g., Lennar, DR Horton): You generally don't need insurance until closing day. The builder insures the structure while they own it.

If you are hiring a custom builder on your own land: You likely need a **Builder's Risk Policy**. This covers theft of materials (lumber provided dropped off), fire during framing, and liability if a kid sneaks onto the site and gets hurt.

Don't Underinsure!

Just because you paid $400,000 for the house doesn't mean it costs $400,000 to rebuild.

Developers have economies of scale. If your house burns down, a custom builder will charge much more to rebuild just your single unit. Ensure your dwelling coverage reflects the **reconstruction cost**, not just the market price.

Conclusion

Enjoy your new home and the lower premiums that come with it. Just remember to review your policy every year as that "new home discount" fades.