Are your clients weighing new and resale homes in their search? Clue them in on this lesser-known benefit of buying new: newly built homes typically have lower insurance premiums than older homes.
Many factors are used to determine homeowners insurance rates, including the home’s location, risk factors (e.g., swimming pools and trampolines on the property) and, of course, the buyer’s credit score. But also important are the age of the home and its type of construction.
Brand-new homes are built with brand-new materials, including modern plumbing, wiring and HVAC equipment. Your clients should understand that new homes are generally in better shape than their resale counterparts, and therefore typically pose less risk for insurance companies. That’s a difference your buyers could see in their insurance premiums.
Additionally, new homes are usually backed by homebuilder and manufacturer warranties. For instance, Richmond American homes generally include the following standard coverages:
- 1-year limited warranty on stated material and workmanship
- 2-year limited warranty on stated systems
- 10-year limited warranty on major structural items
As you know, if your client makes an offer on a resale, he or she may be left with little to no remaining warranty and mounting repair bills—plus higher insurance premiums. Although this is not necessarily the case with all homes, it’s something you’ll want to make buyers aware of before you start touring properties.
Visit a Sales Center for details on the terms, conditions and limitations of the limited warranty provided in connection with the purchase of a Richmond American home or to view the documentation.
For more information about communities and homes in the area you serve, call 888-500-7060 or visit RichmondAmerican.com. For information about homeowners insurance, including an estimate, buyers can contact an insurance specialist from our affiliate, American Home Insurance Agency, at 888-325-8108.