If you plan to buy a home, you may wonder if it costs less to insure a new house than a previously-owned property.
The fact is, insurance companies charge less to underwrite new construction, and typically offer cheaper rates for newer homes versus pre-existing structures. As you look into the reasons why insurers set their premiums, you can also learn about exactly what homeowner insurance involves, why the condition of the property affects your rates and the different types of coverage that is offered.
A newly-built home is less likely to have some sort of a structural or internal issue, which lessens the probability that the owners will need to file a claim. Aside from unforeseen damage from extreme weather events, new homes rarely have problems, especially if you buy from a highly reputable firm such as Rolwes Company — the premier builder of new homes in St. Louis. A new house will incur lower rates, allowing you to buy more coverage for less.
Older houses can be seen by insurers as “high risk” properties. This is because specific structural components such as the roof and foundation, internal systems such as electrical and plumbing and exterior cosmetic features can become fragile over time, requiring maintenance and repair from experts (like the kind of electrician bentleigh is known to have, to name but one example). Some companies may even refuse to offer coverage for certain homes with severe wear and tear. Plus, outdated building materials and techniques which are known to cause problems can mean some older buildings may only qualify for limited coverage based on condition.
According to a report recently published by thezebra.com, the average homeowners insurance premium for new construction is $966.00. Meanwhile, the same policy for a home that is 10 years old is $1478.00 per year and a home that is 20 years old will cost $1670.00 annually. For a new home, these rates put the monthly premium at a very affordable rate while saving over $500.00 per year.
A standard insurance policy will carry dwelling coverage, which includes the home and any attached structures such as a carport or garage as well as internal systems such as heating, air conditioning, plumbing and wiring. A new home is very unlikely to experience problems with these features, which allows new home buyers to secure the most competitive rates the market will bear. In addition, this coverage handles damage from elements such as fire and smoke, windstorms, lightning strikes and hail. Most standard policies will also include “other property” which is defined as a shed, a detached garage or a fence.
Standard homeowners insurance policies carry “contents coverage” for personal property within the home. This distinction can include things like appliances, furniture, clothing, electronics, artwork and antiques. Most policies also include provisions for “home liability” which covers medical expenses if a visitor becomes injured on your property. This feature can also provide coverage for you if you are in an accident outside the home.
Additionally, most policies provide coverage for “additional living expenses” in the event that your house is rendered temporarily uninhabitable by weather or some other event and you must seek accommodations elsewhere while repairs are made. A homeowners insurance policy for a new construction will carry this kind of comprehensive coverage, whereas an older house may not qualify for such all-inclusive provisions.
Lower insurance rates on a new home can allow you to obtain comprehensive coverage while saving money. Contact us to learn more about newly-built houses which will readily qualify for the best homeowners insurance available today.
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