New House Insurance

[myhusky]

Hi,

My new house is closing this Dec. Just wondering will newer houses have higher insurance premium compare to older ones?

[speedyforme]

I would think the opposite as I get a discount on my home insurance that says "new home discount"

Not sure though.

[tdott]

Hi,

My new house is closing this Dec. Just wondering will newer houses have higher insurance premium compare to older ones?

It's based on value, cost to rebuild, location and distance from the fire station more than anything. I don't think age has much to do with it. Except an older smaller house on $$ land might be cheaper to rebuild than the same value new house.

[MisterJ]

Speaking only out of my logic, but I would think a new home would cost less to be insured.
As building codes have changed and increased over the years, I can only imagine that this would be seen as a less risky bet by the bank.
I'm thinking about old electrical wires in old homes...things like that.

Actually less than a couple weeks ago I was shopping for home insurance.
I had my auto insurance through Belair Direct so naturally I called them to get a quote for home insurance. They estimated the cost of replacement for my home to be $360,000 and the monthly premium for insurance would be $120! This was the price even when bundled with my existing auto insurance.

Called up RBC to get a quote from them. After bundling my auto insurance with them (came in a few dollars lower than Belair as well!), they estimated the replacement value of my home to be $430,000 and the monthly premiums would be $42.

I couldn't make any sense of why the replacement value would be more but the monthly premiums to be so much cheaper. You can guess which company I decided to go with in the end. :)

Good luck with your search!

[Linutor]

I found the same thing when I got a quote with TD. I have the car with Bel-Air and I really like them, but the top drawer insurance policy with TD was over a hundred dollars a year cheaper than Bel-Air Direct with substantially more coverage. And their replacement value for the house was almost double what Bel-Air quoted. Strange indeed.

[speedyforme]

To put some perspective, my aunt has a replacement value of $440k on a home in a neighbourhood where homs sell for $800-$1M+. But she pays $100/month and it say full replacement.

My parents has a replacement value of $620k on a home in an neighbourhood where homes sell for $400-$500k. But she pays about $65/month but it doesn't say full replacement.

My aunt argued that she has this package where even though the replacement value is $440k, if anything happened, basically she would get her hosue exactly the way it was regardless of replacement value.

[peelhic]

Yes, newer homes will always be relatively cheaper but it depends on the territory its in and many other factors that are used when determining the rate.

[coolspot]

I would think the opposite as I get a discount on my home insurance that says "new home discount"

Yes, newer houses have lower premiums, since they're built to newer code standards.