Navigating Homeowners Insurance for New Construction Homes: What You Need to Know
Building a new home can be a very exciting journey filled with plenty of options, opportunities, and choices which will reflect your personal style and functional needs. However, even though this is certainly an exciting time, it’s important to take a step back and realize the importance of homeowners insurance for new construction homes. Homeowners insurance for new construction homes has its nuances, and being able to know which coverage you need is essential for ensuring your home is safeguarded. Here’s a full guide on the specifics of homeowners insurance for new construction homes.
Why is Homeowners Insurance Different for New Construction?
Homeowners insurance for new construction homes is custom-tailored to the unique needs, risks, and challenges associated with a brand new property. Unlike existing homes, new construction homes require insurance which covers the risks from quite literally the ground up. Here are some of the factors which makes it different:
Builder’s Risk Insurance: During the construction process, your home may be vulnerable to a wide variety of risks. These risks could include theft, vandalism, and natural disasters. Builder’s risk insurance, which is a key part of homeowners insurance for new construction, covers the home structure until it’s completed. It’s so important to ensure your policy transitions smoothly from the construction phase to the standard homeowners insurance phase as you move into your dream home.
Warranty Protection: New homes will often come with a builder’s warranty which will cover any defects occurring during the construction process. It should be noted, these warranties can be somewhat limited when put into practice. Homeowners insurance for new construction homes is a great way to fill the gaps left by a builder’s warranty. This will ensure broader protection against any possible defects or damages which may have occurred during the construction process.
Key Coverage to Consider
When selecting homeowners insurance for your new construction, consider these key areas of coverage:
Dwelling Coverage: Dwelling coverage is the true cornerstone of any homeowners insurance policy. Dwelling coverage covers the cost of repair or rebuild of your home if damaged by a covered peril such as wind damage, hail damage, fire damage, etc… You’ll want to ensure the coverage amount you choose accurately reflects the true construction costs of your home.
Liability Insurance: Liability insurance will protect you if someone happens to injure themselves on your property and pursues a lawsuit against you. Liability insurance is so important, as construction sites can be very hazardous places for both workers and bystanders. Accidents do happen from time to time on construction sites, so you’ll want to protect yourself from any liability with the right policy in place.
Personal Property: Personal property coverage will protect the items, both old and new, which happen to be within your new construction home. Everything from furniture to personal electronics will be protected against theft or damage.
Additional Living Expenses (ALE): If a covered peril affects your home to the point it’s temporarily unlivable, ALE coverage will help to ensure you have a place to reside while your home is being repaired or rebuilt.
Tips for Buying Insurance for New Construction
- Work Closely with Your Builder: You and your builder should have an open line of communication during the construction process. You’ll want to determine what your builder’s insurance covers and for how long it covers those aspects of your new home construction. Some aspects may be covered during the construction process, and some may cease to be covered once the construction process has been completed.
- Evaluate the Construction Materials: The materials in your new construction home should be fully considered prior to installation, as the chosen materials may affect homeowners insurance premiums in a positive or negative way. An example of this could be if you used fire-resistant materials, your homeowners insurance premiums may drop slightly.
- Shop Around: Insurance policies will vary from insurer to insurer. Obtaining quotes from multiple insurers to determine which group will be best for your specific coverage needs is the right move.
Choose Portsmouth Atlantic Insurance for Your New Construction Homeowners Insurance
If you’re building a new home from the ground up, you’re most likely extremely excited about the entire process. When you have the right level of protection with the right homeowners insurance policy by your side, you can rest assured you’ll be protected should a covered peril occur during the construction process. A proper homeowners insurance policy can also protect your dream home for many years to come, well beyond the initial construction phase. Contact us if you’ve been searching for a homeowners insurance policy for your new construction home. We’ll be happy to assist in any way we can. We look forward to hearing from you soon!