You may assume that a brand new property will be more expensive to insure than an older home. Is that a good assumption? Are insurance rates higher for a new home?
According to insurance.com, that's not the case. Insurance rates for older homes are often higher than rates for a new home. In fact, they state, "It is likely that people with older homes will pay more to rebuild their homes if they are damaged or destroyed and that's why they face higher insurance rates.” Part of that is due to the fact that an older home is more likely to have things go wrong. And the key for the insurance companies is what it will cost them to replace or repair a home.
Agentinsure.com supports that view, stating, “[In general] older homes are often more expensive to insure. Many companies find that the increased costs of insuring an older home justify higher premiums for consumers. As a result, typical home insurance premiums may increase due to an older home.” Part of the reason for that is that outdated electrical and plumbing systems are expensive to repair or overhaul. Some materials (such as plaster walls or original wood flooring) are no longer available or are hard to come by. On top of that, when dealing with older homes workers may have to deal with lead paint, asbestos, and mold. That’ makes repairs costly.
There are other factors that play a big role in the cost of home insurance that actually have nothing to do with the home itself. Here are just a few.
Deductible: Some homeowners opt for a lower deductible. That means paying a somewhat higher rate
Pets: There are certain breeds of dogs that can cause your rates to be higher because they are considered a higher risk for biting
Wood-Burning Stoves: Depending on the kind of stove you install, you could impact your rates
Marital Status: Married couples tend to get lower rates because the data shows them to be a lower risk
Swimming Pool/Hot Tub: These are nice features to have, but they can bump your rate up
Credit History: Homeowners with better credit history tend to get lower rates
Claims History: If your home has had claims before (even if you weren’t living in it) you may face higher rates
In short, there are quite a number of things that can result in a homeowner paying more for insurance. As a general rule of thumb, however, a new home is often less expensive to insure. Plus, you get the benefit of finishing your new home to your specifications and to your level of comfort. And you’re less likely to need repairs in the first place.
Insurance costs shouldn’t keep you from building a new Connecticut home. But here’s a helpful article that can help you think through your decision about whether to build a new home or remodel an existing home in the Wallingford area.