The best home insurance for new constructions depends on your coverage needs and priorities. In our analysis, National General is the best company for cheap rates for new builds. Hippo is the best option if you're looking for a variety of coverage choices for your new home.
Homeowners insurance for new construction, or new builds, is typically more affordable than homeowners insurance for older property types. This is because newly constructed homes are made with updated construction materials, wiring, household systems, and more — which means you're less likely to file a claim.
How much does homeowners insurance cost for new construction?
While the average cost of homeowners insurance in the U.S. is $1,754 per year, your rates are generally going to be cheaper if you're insuring a recently built home. In fact, a new home costs roughly 13% less to insure than a 10-year-old home, and is 32% cheaper to insure than a 20-year-old home.
As the chart and table below show, the newer the home, the lower your rates will be.
Age of home | Average annual cost | Average monthly cost |
|---|---|---|
New home | $1,200 | $100 |
10 years old | $1,358 | $113 |
20 years old | $1,724 | $144 |
30 years old | $1,776 | $148 |
50 years old | $1,797 | $150 |
Because newer homes are built with up-to-date construction materials, new electrical and plumbing work, and brand new appliances, they're less likely to suffer an electrical fire or structural damage after a storm.
Your home insurance rates are primarily based on how likely you are to file a claim, as well as the estimated cost of repairs should the home incur a loss. Insurance companies generally correlate new homes with less frequent claims and lower repair costs, so they'll often charge significantly less for coverage.
→ Learn more about the factors that affect your homeowners insurance premiums
Average home insurance rates by company and home age
Looking at the top homeowners insurance companies in the U.S., we calculated each company's average annual premium for various home ages, including new construction. National General and Progressive offers the most affordable home insurance rates for new construction homes, while Travelers has the most expensive rates.
Insurance company | New home | 10 years old | 20 years old | 30 years old | 50 years old |
|---|---|---|---|---|---|
AAA | $1,118 | $1,651 | $1,790 | $1,930 | $2,076 |
AIG | $1,009 | $1,227 | $1,291 | $1,266 | $1,303 |
Allstate | $947 | $1,580 | $1,726 | $1,717 | $1,681 |
American Family | $1,075 | $1,658 | $1,768 | $1,799 | $1,823 |
Amica | $1,739 | $2,385 | $2,464 | $2,473 | $2,497 |
ASI Progressive | $659 | $1,354 | $1,796 | $1,884 | $1,850 |
Auto-Owners Insurance | $942 | $1,301 | $1,462 | $1,561 | $1,511 |
Chubb | $1,489 | $1,932 | $1,985 | $1,964 | $1,854 |
Erie | $709 | $1,179 | $1,492 | $1,465 | $1,589 |
Farmers | $1,361 | $1,937 | $2,177 | $2,169 | $2,156 |
Narragansett Bay | $982 | $1,228 | $1,323 | $1,426 | $1,446 |
National General | $555 | $782 | $919 | $1,007 | $1,042 |
Nationwide | $782 | $1,402 | $1,995 | $2,109 | $2,045 |
Pure Insurance | $1,469 | $1,827 | $1,958 | $2,079 | $2,110 |
State Farm | $1,143 | $1,727 | $1,931 | $1,935 | $1,939 |
The Hartford | $1,479 | $1,886 | $2,259 | $2,495 | $2,460 |
Travelers | $2,472 | $4,063 | $5,512 | $6,138 | $5,989 |
Universal Property | $1,396 | $1,500 | $1,555 | $1,659 | $1,704 |
UPC Insurance | $1,059 | $1,368 | $1,649 | $1,714 | $1,716 |
USAA | $836 | $1,251 | $1,501 | $1,547 | $1,566 |
Best homeowners insurance companies for new construction homes
Here are our picks for the best homeowners insurance companies for new construction in 2022.
Progressive: Best new construction discount
National General: Best for cheap rates
Hippo: Best coverage for new homes
To come up with our top picks, our team of licensed home insurance experts compared average annual rates from several companies for homes that are new builds, 10 years old, 20 years old, 30 years old, and 50 years old. In addition to cost, we also looked at policy options to see which company offered the best coverage options for new homes.
You can check out our full methodology below.
Progressive: Best new construction discount
Progressive
4.5
Bundle home & auto
Why we chose it
ASI Progressive offers the biggest home insurance savings for new builds, with premiums on newly constructed homes costing a whopping 63% less than premiums for a 20-year-old home.
Pros and cons
Pros
Available in all states except Alaska and Hawaii
Slew of policy and discount options available
Easy-to-use app to manage policy
Cons
Not a direct insurance carrier
Cost varies by company Progressive places you with
Customer service & claims options vary by company
More details
Average annual premiums by home age:
New builds: $659
10 years old: $1,354
20 years old: $1,796
State availability
ASI Progressive home insurance is available in all 50 states and Washington, D.C.
National General: Best for cheap rates
National General offers the cheapest home insurance rates for new homes, with an average annual premium of $555 for a new build with $300,000 in dwelling coverage.
Average annual premiums by home age:
New builds: $555
10 years old: $782
20 years old: $919
Availability: All 50 states
How to get a quote: Online through Policygenius or National General
Hippo: Best coverage options for new homes
Hippos budget-friendly home insurance policies offer the best protection for new builds. From its enhanced coverage for appliances and electronics to its smart home program and discounts, Hippo policies are tailored for the modern home.
Average annual premiums by home age:
New builds: $833
10 years old: $2,202
20 years old: $2,149
Availability: 38 states
How to get a quote: Online through Policygenius or Hippo
→ Read our full Hippo homeowners insurance review
How does homeowners insurance cover new construction homes?
A standard homeowners insurance company will cover your new home with the same six basic coverages offered to other homes — the main difference is that your homeowners insurance rates may be cheaper, since you’re less likely to file a claim. You may even be offered a discount on your premiums for having a newly built home.
Below is a look at what home insurance covers.
Dwelling coverage: Pays to rebuild the structure of your home and attached structures — like a garage — if they’re damaged by a covered peril, including fire, wind, or hail.
Other structures coverage: Pays to repair other structures on your property, like a shed or detached garage, if they’re damaged by a covered peril.
Personal property coverage: Pays to repair or replace your belongings if they’re damaged or stolen.
Loss of use coverage: Pays for additional living expenses — like hotel stays, restaurant meals, and pet boarding fees — if you need to live elsewhere while your home is being rebuilt.
Medical payments coverage: Pays for more minor medical expenses — like an ambulance ride or X-rays — if someone is injured on your property, regardless of who was at fault.
Liability coverage: Pays for extensive medical expenses or legal fees if you’re found legally responsible for someone else’s injury or damaged property.
→ Learn about coverage needs for different types of property
Do I need home insurance while the new build is under construction?
A standard homeowners insurance policy is designed for homes that are fully built and ready to be lived in. If you’re looking for coverage for a home that’s currently being built or undergoing a renovation that requires short-term construction, then you may need to purchase one of these coverage types instead.
Builders risk insurance
When building a new home, you may be responsible for purchasing builders risk insurance to protect the insured property from weather-related damage and vandalism. Builders risk insurance only includes coverage for the structure of the home that’s being built and the construction materials.
Depending on your current homeowners insurance company, you may be able to add builders risk coverage to your current policy for an additional fee. If your insurer doesn’t offer it, you’ll need to purchase a separate standalone builders risk insurance policy.
Dwelling under construction coverage
A standard homeowners policy likely won’t cover burglary or damage to your home while it’s under construction. Check with your insurance company to learn if you need to add a dwelling under construction endorsement to your home policy.
Dwelling under construction coverage fills the temporary gap in coverage while your home is undergoing renovations or updates. This endorsement is meant for short-term projects, like smaller renovations, not long-term construction.
3 home insurance discounts for new construction
Most insurers offer multiple ways for homeowners to save on coverage, including home insurance credits and discounts for new or renovated properties, as well as homes with newer roofs.
Here are three common home insurance discounts for new construction or recently remodeled homes.
New home construction discount: A newly constructed home is more structurally sound, it has new plumbing and wiring, a finished basement, a new roof, and is overall faces less risk of being damaged. If your home was built in the last 10 years, you'll likely get a sizable premium discount.
Roofing discounts: Insurance companies also consider your roof's age and material it's made of to set your rates. If you had your roof replaced, make sure to reach out to your insurance company to reap the benefits.
Home renovation discount: Certain home renovations, like replacing your home's plumbing or electrical work, reduce your home's chances of water damage or electrical fires. For that reason, some insurance companies provide discounts if you update these parts of your home.
Frequently asked questions
Is homeowners insurance cheaper on a new home?
Yes, a new home costs around 32% less to insure than a 20-year-old home.
What is the difference between builders risk and homeowners insurance?
Builders risk insurance covers the property while it's under construction, since it's exposed to different risks than a finished, fully occupied home.
Do I need home insurance on a new build?
Yes, once your home is fully built and you're ready to move in, you'll need to purchase a standard homeowners insurance policy for the residence. Your homeowners insurance should technically kick in once the construction is complete, at which point your builders risk policy would no longer be in effect.
Methodology
To find the best homeowners insurance for new home construction in 2022, we looked at average annual premiums from the 50 largest insurance providers in the U.S. by market share. Our rate data was provided by Quadrant Information Services for ZIP codes in all 50 states plus Washington, D.C. for a sample 40-year-old female homeowner with the following coverage amounts:
$300,000 in dwelling coverage
$30,000 in other structures coverage
$150,000 in personal property coverage
$60,000 in loss of use coverage
$300,000 in liability coverage
$1,000 in medical payments coverage
$1,000 deductible
We then took used this profile to calculate average rates for a new home, 10-year-old home, 20-year-old home, 30-year-old home, and a 50-year-old home.
