The Insurance Benefits of Buying New

When you weigh the pros and cons of a new home versus one that’s been “lived in,” make sure to consider all the potential benefits. Some buyers, for example, often overlook insurance-friendly features of new construction. Insurance friendly? Yes, new homes can be sturdier and more resistant to wind and fire, and new wiring and other systems can keep you cooler, dryer, and safer.

Why do all of those factors matter? Because home insurance companies are in the business of evaluating risk. They do it by considering a number of factors, such as square footage, claims, credit history, location, the age and type of home, and much more. To demonstrate how different sizes affect home insurance, plug the numbers into a dwelling coverage calculator (see the HomeInsurance.com calculator). For many reasons, new construction usually translates into a lower risk of filing claims. That could help you qualify for preferred home insurance policies that come with lower premiums.

Weathering the storms

Each year, severe weather damages thousands of homes across the United States. In fact, in 2012 severe thunderstorms alone caused nearly $15 billion in insured losses, according to the Insurance Information Institute (III). Older homes are particularly vulnerable to severe weather damage, which is why newly constructed homes are more desirable to home insurance providers.

Sturdy new roofs are one factor in standing up to storms. No matter what kind of home you buy, one of the first questions an insurance provider will ask is the age of the roof. That’s because roofs take the biggest hit during storms. The average wind and hail claim tops $7,175, the III says. Hail and high winds can weaken a roof over time; however, new roofs are ready to take on years of strong weather.

Preventing house fires

Increased fire safety is another insurance-friendly feature you’ll find in new construction. Older homes often come with outdated electrical systems, which are a major cause of house fires. New homes feature up-to-date electrical systems with circuit breakers and modern wiring that are much safer than the fuse boxes and ungrounded electrical outlets of yesteryear.

House fires can start from air conditioning system failures in old units. In fact, these system failures contribute to about 2,500 house fires a year, according to the National Fire Protection Agency. The updated systems featured in new construction homes are much less likely to fail than older units.

New homes also feature fire safe materials and come standard with smoke alarms, a safety feature that can score you additional home insurance discounts. The average home insurance fire claim exceeds $33,000, according to the III, so buying a new home that reduces the risk of fire is a smart move.

Avoiding water damage

New plumbing systems can help you save on water costs – they’re designed to be more efficient. Older plumbing systems are more likely to leak and waste water. Between the new plumbing and a new heating system, the home will be much less likely to experience damage from frozen pipes. According to the III, frozen and burst pipes are the third largest cause of property losses by homeowners, not to mention a huge mess to clean up. The average claim exceeds $7,000.

The savings

All these factors help explain how “new” helps lower risk – something that home insurance providers already understand. Many offer discounts of up to 20 percent on premiums for homes built within the past 10 years.  Other standard new home features, such as dead bolt locks, can result in discounts of up to 5 percent.

The benefits of buying “new” can extend beyond 10 years. Because you’re much less likely to file a claim for a few years, you’ll be building a great history. Companies often reward policyholders with a history of no or few claims with discounts of as much as 20 percent.

The bottom line: Buying new is an investment you can make that pays off over a number of years when it comes to insurance.

HomeInsurance.com contributed to this story. HomeInsurance.com is a national insurance marketplace where homeowners can compare rates from leading U.S. insurance carriers, please visit their website to learn more.

This Post Has 4 Comments

  1. Danien Harper

    Thanks for the tips when considering the purchase of a Toll Brothers home. I plan on getting insured with companies that offer the options that you gave, thank you!

  2. Matt

    Thank you Toll Brothers. Very sound advice. Not to mention the added benefit and savings earned by having new and great efficient appliances: water heaters, furnaces, a/c, exhaust fans, etc…

    1. Toll Brothers

      Hello Bernice, thank you for your comment and interest in Toll Brothers! All of our communities in Texas offer floor plans that have the option to add a second master bedroom. In order for us to better help you with your new home search, please let us know which region of Texas you are most interested in. You can also contact our Texas Online Concierge team at 855-289-8656, or TXConcierge@TollBrothers.com. We have also passed your information along to them, so they will be reaching out to you as well.

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