Homeowners insurance costs for new constructions average $2,379 per year for $250,000 in dwelling coverage with a $1,000 deductible. Higher or lower limits can affect home insurance premiums by an average of $6,192 per year.
Homeowners Insurance Cost for New Construction
Updated: April 17, 2026
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Key Takeaways
New construction homeowners insurance averages $198 per month ($2,379 per year) for $250,000 in dwelling coverage with a $1,000 deductible.
AIG Insurance offers the most affordable rates for new homes at $75 per month for $250,000 in dwelling coverage, with Amica offering the next-best rates at $79 per month.
Average premiums for new construction scale from $103 per month for $100,000 in dwelling coverage to $478 per month for $1 million in dwelling coverage, making coverage limits a significant pricing variable.
Average Cost of Home Insurance for New Construction
| $100K Dwelling / $50K Personal Property / $100K Liability | $103 | $1,238 |
| $250K Dwelling / $125K Personal Property / $200K Liability | $198 | $2,379 |
| $500K Dwelling / $250K Personal Property / $300K Liability | $336 | $4,038 |
| $750K Dwelling / $375K Personal Property / $500K Liability | $478 | $5,741 |
| $1MM Dwelling / $500K Personal Property / $1MM Liability | $619 | $7,430 |
Best Cheap Home Insurance Companies for New Construction
At $250,000 in dwelling coverage, AIG Insurance offers the best home insurance for new homes at $75 per month or $904 per year. For military members and their dependents, USAA offers exclusive coverage and is the best option at $1,331 per year.
Rates can change by coverage level and provider. Compare home insurance quotes below to find cheap home insurance that meets the requirements of your new home.
Data filtered by:
$250K Dwelling / $125K Personal Property / $200K Liability
| AIG Insurance | $75 | $904 | 4.76 |
| Amica | $79 | $954 | 4.75 |
| CSAA | $88 | $1,052 | 4.57 |
| AAA | $104 | $1,248 | 4.52 |
| USAA | $111 | $1,331 | 4.85 |
| State Farm | $126 | $1,514 | 4.5 |
| Nationwide | $139 | $1,663 | 4.24 |
| Farmers | $161 | $1,928 | 4.3 |
| Homesite | $161 | $1,937 | 4.13 |
| American Modern | $163 | $1,952 | 3.86 |
| Allstate | $180 | $2,155 | 4.16 |
| Progressive | $264 | $3,173 | 3.83 |
| Travelers | $276 | $3,317 | 3.68 |
| Chubb | $292 | $3,498 | 4.28 |
EXPLORE THE BEST HOME INSURANCE FOR NEW CONSTRUCTION
Why New Construction Homes Cost Less to Insure
New construction homes cost less to insure because they’re built with newer materials and updated systems, which reduces the risk of damage or claims. Modern building codes also improve resistance to hazards like fire, wind and water damage. With fewer expected repairs and lower claim frequency, insurers typically offer lower premiums.
WHEN INSURANCE COSTS MAY BE HIGHER FOR NEW CONSTRUCTION
High-end builds with custom materials and luxury finishes raise replacement cost estimates and premiums. Homes in high-risk locations (coastal, wildfire-prone or flood zones) cost more to insure regardless of age. Larger square footage also increases dwelling coverage requirements and, by extension, the annual premium.
Other Factors Affecting New Construction Home Insurance Costs
New construction homes carry a baseline cost advantage, but several factors still determine the final premium. Understanding these pricing variables helps homeowners estimate what they will pay and identify opportunities to lower their rate.
Home Value and Coverage Limits
Higher dwelling coverage directly raises premiums. A $1 million home costs more to insure than a $250,000 home, even if both are newly built.
Location and Risk Exposure
Weather risks, crime rates and local rebuild costs all affect pricing. Coastal or wildfire-prone areas push premiums higher regardless of a home's age.
Deductible Selection
Higher deductibles lower monthly premiums but increase out-of-pocket costs after a claim. Adjusting your deductible is one of the most direct ways to change your rate.
Home Features and Materials
Fire-resistant materials, new plumbing and updated wiring reduce the insurer's risk. These features often lead to lower rates compared to homes with older systems.
Credit Score and Claims History
Insurers use both credit score and claims history to estimate risk. Strong credit and a clean claims record typically lead to lower premiums.
Ways to Lower the Cost of New Construction Home Insurance
New construction already carries a cost advantage over older homes, but homeowners can reduce premiums further with specific actions.
Bundle Policies
Combining home and auto policies can qualify you for multi-policy discounts. Many insurers offer 5% to 15% savings when you bundle.
Increase Your Deductible
The average home insurance deductible is $1,000, but raising this to $2,000 can lower your monthly premium by an average of $329 yearly. While this can lower your rate, remember to choose a deductible amount you can afford to pay out of pocket after a loss.
Install Safety Features
Security systems, smoke detectors and smart home technology reduce the insurer's risk assessment. Insurers often reward these upgrades with premium discounts.
Shop Multiple Quotes
Prices vary widely between insurers for new construction homes. Comparing quotes from at least three insurers helps you find the lowest rate for your coverage needs.
Maintain Strong Credit
Better credit scores often lead to lower premiums in most states. Credit score is a major factor in how insurers price a homeowners policy.
Homeowners Insurance Cost for New Construction: Bottom Line
New construction homeowners insurance offers a cost advantage, with lower premiums driven by newer materials, modern systems and reduced claim risk. However, costs still vary based on coverage limits, location and home features, with higher-value or high-risk properties driving premiums up. Comparing multiple insurers and adjusting factors like deductibles or bundling policies can help lower costs further. Even with lower baseline rates, homeowners should review coverage details to ensure their policy matches the home’s true replacement cost and risk exposure.
What You’ll Pay for New Construction Home Insurance: FAQ
These FAQs cover common questions about insuring new construction homes, including costs, coverage and ways to save.
Is homeowners insurance cheaper for new construction homes?
Yes, new homes cost less to insure due to lower risk, with average premiums around $198 per month for $250,000 in dwelling coverage.
How much does insurance cost for a newly built home?
Insurance averages $2,379 per year for $250,000 in coverage, with costs ranging from $1,238 per year for $100,000 homes to $7,430 per year for $1 million homes.
Does homeowners insurance for new construction cover construction defects?
Standard homeowners insurance does not cover construction defects, faulty workmanship or builder errors. These issues fall under the builder's warranty or a separate structural warranty, not a standard homeowners policy.
What factors affect new construction insurance costs?
Coverage limits, location, home features, deductible and credit history all influence premiums, with higher coverage levels significantly increasing costs.
Does my mortgage lender require homeowners insurance on a new build?
Lenders require homeowners insurance on any home with a mortgage, including new construction. You will need to provide proof of coverage before closing, and the dwelling coverage amount must at least equal the loan balance.
Rates and insurer data were sourced from state insurance departments and Quadrant Information Services. MoneyGeek's rankings were based on nationally recognized data from J.D. Power, AM Best and Quadrant Information Services, each rated on a scale of 1 to 5 and weighted by importance with a strong focus on affordability.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.