Buying a brand-new home is exciting. Everything is new, the home was built to current standards, and you may even have the opportunity to choose finishes and upgrades before you move in.
But a new home still needs the right insurance — and getting coverage for a newly constructed home can involve questions that don’t come up the same way with an older property.
If you’re buying a newly built home in Florida, it’s important to start the insurance process early. Your home’s location, construction, roof, wind-mitigation features, replacement cost, flood exposure and even the timing of construction and closing can affect what insurance options are available.
Here’s what to know before you close.
When Should You Get Insurance for a New Construction Home?
Don’t wait until the week of closing to start looking for homeowners insurance.
Ideally, start the process as soon as you have enough information about the property to obtain a quote. Your insurance agent may need details about the home that aren’t included in a basic listing, and the insurance company may have additional underwriting requirements before coverage can be finalized.
Starting early gives you time to:
- Compare available insurance options
- Confirm the home is eligible for the coverage you want
- Determine the appropriate dwelling coverage
- Review wind-mitigation features
- Discuss flood insurance
- Understand your hurricane deductible
- Provide proof of insurance to your mortgage lender
- Resolve underwriting questions before closing
Florida insurers can consider a variety of property characteristics when determining eligibility and premium, including construction, roof characteristics, location, square footage, wind-mitigation features and prior insurance history.
In other words, getting a homeowners insurance quote is part of the home-buying process, not something to handle after everything else is finished.
Is New Construction Cheaper to Insure?
Sometimes — but don’t assume that a brand-new home automatically means a lower insurance premium.
New construction can have characteristics that insurers view favorably. A new roof, newer electrical and plumbing systems, modern construction techniques and current building-code requirements can all be relevant to underwriting.
Florida’s wind-mitigation requirements are particularly important. Features designed to reduce hurricane damage can qualify for insurance premium discounts when properly documented.
At the same time, the cost of insurance depends on much more than the age of the house.
An insurer may also consider:
- Where the home is located
- Distance and exposure to the coast
- Construction type
- Roof design and materials
- Amount of dwelling coverage
- Wind-mitigation features
- Flood exposure
- How the home will be occupied
- Pools, screened enclosures and other structures
- Solar panels or other specialized features
- Prior insurance history
- The insurer’s current underwriting guidelines
So while a new home can have advantages, “it’s brand new” isn’t enough to predict what the insurance will cost.
What Information Does an Insurance Company Need for a New Home?
The more complete the information you provide, the easier it is to get an accurate quote.
Depending on the property and insurer, your agent may need information such as:
- Property address
- Year of construction
- Square footage
- Number of stories
- Construction type
- Foundation type
- Roof age and material
- Roof shape
- Garage type
- Exterior wall construction
- Windows and exterior openings
- Plumbing, electrical and HVAC information
- Pool or spa
- Screen enclosure
- Detached structures
- Solar panels
- Security systems
- Intended occupancy
- Mortgage lender information
- Prior homeowners insurance
- Claims history
For a newly constructed home, some of this information may come directly from the builder, plans, closing documents or inspection records.
Your agent may also need documentation supporting wind-mitigation features or other characteristics of the home.
New Construction and Wind Mitigation
Wind mitigation deserves special attention in Florida.
Modern homes may include features designed to reduce damage from hurricane-force winds. Depending on the home’s construction and documented features, these can affect the wind portion of your homeowners insurance premium.
Florida requires admitted insurers to offer premium discounts for qualifying hurricane-loss mitigation features, and a properly completed wind-mitigation inspection can document features that may qualify for those credits.
For a new home, don’t simply assume the insurer already has every piece of documentation it needs.
Ask:
- What wind-mitigation features does the home have?
- Is there a completed wind-mitigation inspection?
- Are the roof and opening-protection features documented?
- Does the insurance company need additional documentation?
The exact credits and requirements depend on the property and insurer, but documenting the home’s mitigation features can be an important part of the quoting process.
How Much Dwelling Coverage Does a New Home Need?
One of the biggest mistakes you can make is assuming the home’s purchase price automatically determines the amount of dwelling coverage you need.
It doesn’t.
Homeowners insurance generally uses a replacement-cost approach for the dwelling rather than simply insuring the home’s market value. The cost to rebuild can differ substantially from what you paid for the property.
For a new home, the construction details can make the replacement-cost estimate especially important.
Your insurance agent may need information about:
- Square footage
- Construction type
- Exterior materials
- Roof
- Interior finishes
- Attached structures
- Garage
- Custom features
- Other improvements that would need to be rebuilt after a covered loss
A house with upgraded flooring, custom cabinetry, higher-end fixtures or other special features may have a different reconstruction cost than another home of the same size.
The goal isn’t simply to insure the house for what you paid for it. The goal is to establish appropriate coverage for the property being insured.
What About Flood Insurance?
Your homeowners policy does not automatically mean you’re covered for flooding.
This is especially important in Florida, where flood exposure can vary significantly from one property to another.
Flood insurance is generally a separate consideration from your homeowners policy. Even if your mortgage lender does not require flood insurance, that does not necessarily mean flooding is an insignificant risk.
When you’re buying a new home, ask about flood exposure before closing, rather than waiting until after you’ve moved in.
Your agent can help you determine whether a separate flood policy should be part of the insurance program for the property.
Understanding the Hurricane Deductible
Florida homeowners policies may have a separate hurricane deductible, and it’s important to understand it before you choose a policy based solely on premium.
Depending on the policy, the hurricane deductible can be expressed as a dollar amount or a percentage of the insured dwelling limit. Florida law establishes specific deductible options and rules governing when the hurricane deductible applies.
For example, a 2% hurricane deductible on a home insured for $500,000 would represent $10,000.
That’s a very different out-of-pocket exposure from a $1,000 or $2,500 standard deductible.
When comparing new-home insurance quotes, don’t just ask:
“Which one is cheaper?”
Ask:
“How much would I actually have to pay if this house had a covered hurricane loss?”
Your hurricane deductible, all-other-perils deductible and any other applicable deductibles should be reviewed together with the coverage itself.
What If the House Is Still Being Built?
This is where new construction insurance can mean something different from ordinary homeowners insurance.
If you’re buying a completed new home from a builder, you’re generally dealing with a homeowners policy for the completed property.
If you’re building the home yourself or purchasing a property that is still under construction, the insurance situation can be different.
A standard homeowners policy isn’t necessarily the appropriate solution for a house that is still being constructed. Depending on the project, ownership, lender requirements and insurer, construction-phase coverage may involve builder’s risk, course-of-construction coverage or a dwelling-under-construction homeowners option.
The important point is to determine what coverage applies during construction and how it transitions to coverage for the completed home.
Don’t assume the builder’s insurance protects your financial interest in the property, and don’t assume a future homeowners policy automatically covers the construction period.
If you’re building rather than purchasing a completed home, talk with your insurance agent and lender early in the construction process.
Your Builder Recommended an Insurance Company. Do You Have to Use Them?
Not necessarily.
Builders, lenders and real estate professionals may have insurance companies or agencies they regularly recommend. Their recommendation can be a useful starting point, but you can generally shop for your own homeowners insurance.
This is especially important in Florida because insurance availability and underwriting can vary significantly between companies.
An independent insurance agency can review the property and compare the insurance options available through the markets it represents.
The goal isn’t necessarily to find the lowest premium. It’s to find coverage that fits the property, your financial situation and the insurer’s underwriting requirements.
What Should You Compare When Shopping for New Construction Home Insurance?
Two quotes can have different premiums because they provide different coverage or have different deductibles.
When comparing policies, look beyond the number at the bottom of the quote.
Compare:
Dwelling coverage
Does the dwelling limit appropriately reflect the estimated cost to rebuild the home?
Other structures
How are detached garages, sheds, fences and other structures handled?
Personal property
Is your household property covered on the basis you expect?
Liability
How much personal liability coverage is included?
Deductibles
Look at the standard deductible, hurricane deductible and any other applicable deductibles.
Wind coverage
Make sure you understand whether windstorm coverage is included and how the policy handles wind-related losses.
Flood
Remember that flood coverage is generally separate from homeowners insurance.
Endorsements
New homes can have valuable upgrades or features that may require additional coverage or endorsements.
Exclusions and limitations
A lower premium may sometimes reflect narrower coverage rather than a better deal.
The right comparison is coverage against coverage, not simply premium against premium.
What Can Change Before Closing?
A homeowners insurance quote isn’t necessarily final just because you’ve received a number.
If information about the property changes, the insurer may need to reevaluate the quote.
For example:
- The closing date changes
- The occupancy changes
- The final square footage differs from the original information
- A pool or enclosure is added
- The roof specifications change
- Additional structures are added
- The purchase price or financing changes
- Construction is delayed
- The home is not completed when originally expected
Keep your insurance agent informed if something significant changes before closing.
It’s much easier to resolve an underwriting question before you’re sitting at the closing table.
New Construction Home Insurance Checklist
Before closing on a newly constructed Florida home, make sure you’ve discussed:
- When homeowners coverage should begin
- Whether the home is complete or still under construction
- Dwelling coverage and replacement cost
- Wind-mitigation features
- Hurricane deductible
- Standard deductible
- Flood exposure and separate flood insurance
- Roof construction and documentation
- Pool and screen enclosure
- Detached structures
- Solar panels or other special features
- Personal liability coverage
- Mortgage lender requirements
- Any required inspections or documentation
- Final closing date
- What happens if construction or closing is delayed
Get a New Construction Home Insurance Quote
A brand-new home can have some meaningful insurance advantages, but the right policy still depends on the property, its construction and the insurance companies available for that particular risk.
At Smith & Thomas Insurance, we help Florida homeowners evaluate their homeowners insurance options and understand the coverage behind the quote — not just the premium.
If you’re buying a newly constructed home, it’s worth starting the conversation before closing so there’s time to address underwriting questions, documentation, deductibles and coverage options.
Contact Smith & Thomas Insurance to discuss insurance for your new construction home.