Why Homeowners Insurance Costs Less on New Construction Homes

June 25, 2025  |  Uncategorized

You’ve decided to buy a home in Florida. You have a budget, you have a down payment, you know where you want to be. Now all you have to do is find the home that works for you. Part of the expense of maintaining a home is homeowners insurance. If you have a mortgage, you must carry insurance. If you own your home outright, you can decide if you want to have insurance.

Be sure to consider the financial implications of purchasing a resale home if you’re required to have homeowners insurance. An older home carries more risk for the insurance company, and that risk costs you more. Let’s look into the logic.

New construction homes are less risky to insure because homes built post-2002 are engineered to considerably reduce wind and hurricane damage. The Florida Building Code was enacted in 2002, replacing local building codes. These changes came after the devastation caused by Hurricane Andrew in 1992. Additionally, new construction homes use impact-resistant windows, wind-rated roofing, up-to-date electrical and plumbing systems, which further diminish risk.

Data from Hippo Insurance, found that premiums on existing homes were, on average, 53.9% higher than new construction homes in 2024. Older homes can have an aging infrastructure increasing the risk of water or electrical damage. The home may have been built before modern safety codes were put in place. New construction homes have so many structural advantages making your home more resilient.

As Holiday Builders’ blogger, I’ll use myself as a real life example. I bought an older home in 2022 – a home built in the 1950’s. I received notification within a month of closing, from my insurance company. letting me know that I needed a new roof or my insurance would be cancelled. Fortunately I know people in the building business and was able to secure a contractor and get the work done. It wasn’t an expense I thought I’d be undertaking immediately upon purchasing my home.

That said, if you’re set on purchasing a resale home, be sure to know what structural updates you may need to undertake to keep your insurance costs down. You might be able to save by bundling your home and auto policies. While the State of Florida works on insurance reforms, homeowners in Florida have to navigate the financial implications of protecting their home. So what are the takeaways?

• New construction homes offer embedded cost savings – often tens of thousands over the life of a mortgage.
• Insuring an older home can be viable if owners proactively invest in disaster resilience such as wind mitigation, roof updates and smart home systems.
• When running a cost analysis on a home purchase, be sure to look beyond the price of the home. Consider premiums, deductibles, maintenance and repair costs.

Holiday Builders has been building new, single-family homes in Florida for 42 years. We cater to a wide range of customer needs with a variety of floorplans and price options. To learn more, visit a local sales center or HolidayBuilders.com.

This post was written by Tina Suiter.