How Hippo Makes New Homeownership More Affordable

The dream of buying a home is becoming increasingly challenging for many Americans, with rising prices, interest rates, and insurance premiums straining household budgets. Yet, in many parts of the country, new homes are surprisingly affordable—often priced similarly to, or even lower than, existing homes. This is especially true when factoring in incentives like rate buy-downs, which are commonly offered by builders to reduce mortgage costs. 

At Hippo, we’re helping to further bridge the affordability gap with our New Homes Program. By offering flexible and cost-effective insurance solutions tailored specifically for newly constructed homes, we help make it easier for buyers to achieve their dream of homeownership. 

The Growing Affordability Gap

A recent study by National Association of Home Builders found that 103.5 million U.S. households are unable to afford a median-priced home valued at $495,750, based on their incomes and standard underwriting criteria. A $1,000 increase above the median price, a difference of only $7/month in principal and interest, would exclude another 106,031 households from the market—households that would otherwise have qualified for a mortgage on a median-priced home.  

Rising insurance rates will only compound this affordability problem. According to Realtor Magazine the average premium in the U.S. is $2,377 and according to S&P Global U.S. homeowners rates increased by 11.3% 2023. If rates increase by the same amount again in 2024 that would equate to $22 per month increase in household expenses, more than 3 times the $7 per month increase in principal and interest payments, further pricing out many more would-be buyers. 

Hippo: The Affordability Advantage

Hippo is redefining home insurance for new construction with policies that are typically more affordable and more flexible than traditional options.

Our new homes program, which is designed specifically for new construction, offers: 

• Low deductible options: Reducing out-of-pocket expenses in the event of a claim. 
• Flexible coverage choices: Ensuring homeowners pay only for what they need, avoiding unnecessary costs. 
• Tech-enabled solutions: Making it easier for homebuyers to find the best policy for them, delivering faster quotes and a streamlined closing process.

Why New Construction Homes Are Different

Newly constructed homes tend to pose lower risk than older properties due to modern building codes, more resilient materials, advanced safety and technology features, and community-based risk reduction measures. This lower risk enables Hippo and its panel of carrier partners to offer significant savings to homeowners.

For example, based on average state premiums, Hippo and its carrier partners can offer policies for new homes with premiums as much as 69% lower in California, 42% lower in Florida, and 56% lower in Texas than policies for an existing home. These savings can add up to hundreds of dollars annually, making a significant impact on a household’s budget. 

A Partner in Affordability 

The escalating costs of homeownership demand innovative solutions, and Hippo is leading the charge. By prioritizing affordability, flexibility, and modern coverage, we’re not just offering insurance—we’re helping make the American dream a reality for more households. 

If you're a homebuilder or lender who wants to broaden the funnel and help as many buyers get qualified as possible, we’d love to tell you how we can help you. Let’s talk!