Home insurance for new construction in North Carolina

Builder's risk vs. homeowner's insurance

During construction, the builder carries a builder's risk policy that covers the structure against fire, theft, vandalism, and weather damage. Once you close on the home, the builder's risk policy ends and your homeowner's insurance begins.

You need your homeowner's policy in place at closing, not a day later. Most lenders require proof of insurance before funding the loan, so getting this right on time is part of the closing process.

When to get coverage

Start shopping for your homeowner's policy 2-4 weeks before your projected closing date. New construction timelines shift, but getting quotes early lets you compare carriers without pressure. Bind the policy to be effective on the closing date, if closing moves, the policy effective date can typically adjust.

Why new construction gets the best rates

• New roof, no age or condition concerns that drive up older home rates
• New electrical, no older wiring issues that some carriers penalize
• New plumbing, no galvanized pipe or aging system concerns
• New HVAC, modern, efficient systems that carriers prefer
• Built to current NC building codes, includes wind and storm mitigation features

All of the factors that drive up rates on older homes are absent. Expect competitive pricing and multiple strong carrier options.

Setting Coverage A correctly

Coverage A is the dwelling limit, what your carrier pays to rebuild the home after a total loss. For new construction, the purchase price is often a reasonable approximation of rebuild cost since it reflects current materials and labor prices.

Don't set Coverage A below the contract price. Your carrier will run their own replacement cost estimator and may adjust it upward, that's expected. The goal is full rebuild coverage, not the land value or the loan amount.

Builder's warranty and insurance

NC builders typically provide a 1-year warranty on workmanship and a 10-year structural warranty. These cover defects in construction, not insurance perils. If the roof leaks because of a construction defect in year one, that's the builder's warranty. If a hailstorm damages the roof, that's your homeowner's insurance. They serve different purposes and neither replaces the other.

New community HOAs

Many new construction communities have HOAs. The HOA master policy typically covers common areas and exterior elements. Your individual homeowner's policy covers the interior and your personal property. Review both documents to understand where the HOA coverage ends and yours begins.

Cooper's take

Frequently asked questions