What is the new home insurance discount?
The new home insurance discount is a discount on home insurance for newly constructed homes.
It applies only to brand-new construction. How long you’ll qualify for the discount depends on the company, but it’s usually for the first 12 months. After that, you can expect to get an age of home discount that’s not quite as big but still reduces your rates because your house is still very new.
How much is the new home insurance discount?
The new home discount on homeowners insurance is often the largest available. Here’s a look at the average new home insurance discount from top companies.
| Company | Average premium | With new home discount | $ difference | % difference |
|---|---|---|---|---|
| Nationwide | $2,735 | $1,100 | $1,635 | 54% |
| USAA | $2,349 | $1,110 | $1,239 | 53% |
| Travelers | $3,866 | $1,743 | $2,123 | 47% |
| State Farm | $2,255 | $1,316 | $939 | 41% |
| American Family | $2,178 | $1,294 | $884 | 41% |
| Allstate | $1,838 | $1,064 | $774 | 40% |
| Auto-Owners | $2,074 | $1,395 | $678 | 31% |
| Farmers Insurance | $3,455 | $2,399 | $1,056 | 30% |
As you can see, the new home discount is really big and makes a huge impact on premiums.
Why do insurers offer a new home insurance discount?
Brand-new homes are a lower risk to insure. They use the latest construction materials and are built to meet the latest codes. That also means that the insurance company won’t have to pay extra to bring the home up to code if there is a claim.
Because everything’s new, there isn’t any wear or breakdown of the wiring, plumbing or roofing materials (just as a few examples) that could make damage more likely.
“Also, newer homes often have advanced safety features…such as smoke detectors, fire alarms, and security systems to help prevent theft. These features can all help reduce the risk of damage and or loss, which in turn will result in a lower premium,” McKenzie says.
Anything that makes a home less risky to insure makes insurance cheaper.
What factors are considered for the new home insurance discount?
The only thing that matters is that your home is new construction. As mentioned above, some companies also offer a new buyer home insurance discount for people purchasing a new home or their first home. However, that’s a different discount.
