New Construction Does Not Mean You Skip Insurance

One of the most common misconceptions among buyers of new construction homes in Texas is that a brand-new house needs less insurance or that the builder’s warranty covers everything. Neither is true. A newly built home needs proper homeowners insurance just like any other property, and understanding what the builder’s warranty does and does not cover is essential before you close.

What the Builder’s Warranty Covers

Builder warranties in Texas typically cover workmanship defects for one to two years and structural defects for up to ten years. This is not insurance. It does not cover storm damage, fire, theft, liability, or any of the other perils that a homeowners policy covers. The builder’s warranty and your homeowners insurance cover completely different things and you need both.

Setting the Right Coverage Amount for New Construction

For a newly built home, setting your dwelling coverage amount is actually more straightforward than for older homes. You know exactly what the home cost to build. Your dwelling coverage should reflect the replacement cost to rebuild the home from scratch at current construction costs, which for a new home is closely related to what the builder charged.

The important thing is to make sure your coverage keeps up with construction cost inflation over time. Building costs in Texas have increased significantly in recent years and policies need to be reviewed annually to ensure coverage amounts remain adequate.

Builder Risk Insurance During Construction

If you are building a custom home and doing so as an owner-builder, you may need builder’s risk insurance during the construction phase before you can obtain a standard homeowners policy. Builder’s risk insurance covers the structure and materials while construction is in progress. Once construction is complete and you take occupancy, you transition to a standard homeowners policy.

Common New Construction Neighborhoods in the DFW Area

New construction is booming across the DFW Metroplex including areas like Haslet, Northlake, Celina, Prosper, Burleson, Mansfield, and throughout Tarrant and Johnson Counties. We work with homeowners across all of these communities and understand the specific considerations for homes in different areas of North Texas.

What to Do Before Your Closing Date

Your lender will require proof of homeowners insurance before closing. Do not wait until the last minute to shop for coverage. Reach out to us at least two to three weeks before your closing date so we have time to properly structure your policy and have documentation ready for your lender when you need it.

We can often bind coverage and provide proof of insurance the same day for new construction purchases, but having adequate time ensures we set up your policy correctly rather than rushing through it.