The Need-to-Knows of Insuring a Newly Built Home
Whether you’re planning to build, have built or are planning to buy a newly built home, it’s important to consider homeowners insurance early in the process. This will not only help you to save money but will also ensure that you get the right kind of coverage for your property.
The following are some things you need to consider when it comes to insuring your newly built home.
- Not all homes can get insurance
Before you embark on building or purchasing a newly built home, make sure it can be insured. There are various factors that insurance companies consider when they provide insurance. These include the location of the property, its value and various other factors. Some insurance companies may refuse to insure the property or offer a very high insurance rate of the property depending on various factors. Be sure to seek out your insurance provider’s opinion before signing anything or putting down money.
- New builds are cheaper to insure
According to 2009 data from the American Housing Survey (AHS), the median cost of insuring an old home (4 years or more) was 39 cents for every square foot. The median cost of insuring a newly built home was 31 cents for every square foot. Some insurance providers will even offer you a lower rate for the first 12 years of it being built.
- Your builder’s insurance doesn’t cover you
When hiring a contractor to build your home, one of the first things homeowners are advised to look at is their insurance. While a good builder carries a ‘builder’s risk’ insurance policy, it will not cover you. This policy only covers the builder in case of losses that may occur during the construction, such as vandalism or falling trees.
Homeowners will need additional coverage for their own property on the construction site. A ‘course of construction’ policy covers the homeowner in case of liability (e.g. if a child wanders onto the site and is injured).
- Building smart will help lower your costs
You can lower the cost of homeowners insurance by incorporating new technologies and building materials. Insurance providers are now willing to give discounts to customers using smart technologies in their homes. Several insurance providers are coupling with technology firms to provide discounts to customers that invest in smart devices such as thermostats and security systems.
Insurance companies will also give discounts for materials that are durable or energy saving. Investing in durable building materials such as stucco, as opposed to wood for siding, will earn you a discount.
- You can get a better deal
There are several insurance providers in the market today. This means greater competition for customers. Taking the time to compare quotes from different insurance providers will help you get the best homeowners insurance policy possible.
- Your insurance doesn’t cover everything
Don’t make any assumptions when it comes to insurance coverage. According to a survey by the National Association of Insurance Commissioners, many homeowners are not aware of the level of coverage provided by their policies. The survey showed that 35 percent of homeowners thought the damage caused to their homes by earthquakes would be covered by their insurance.
It is important to note that standard homeowners insurance policies don’t cover everything. Review your policy and get extra insurance for those risks not covered in the policy. This will ensure that there are no bad surprises down the road.