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6 Renovations That Can Lower Your Home Insurance Premium (and 3 That Won’t)

Depending on the state you live in, your insurer, and your policy details, homeowners insurance premiums may vary between $57 to $242 per month. Many insurers offer discounts to your annual bill upon proof of home additions that reduce the likelihood of insurance claims or make claims less costly to reimburse. While expensive upfront, significant safety and security updates to your home can save you money on insurance, protect your family from harm, and raise the value of your property.

Here are a couple of relatively easy fixes you can make to your home to simultaneously make it safe and reduce your insurance premiums.

1. Add a Home Security System

Home security systems can cost anywhere from a few hundred to a few thousand dollars to install. Beefing up your home security offers the most straightforward means of reducing policy costs and your risk of loss from a covered peril. Most insurance companies’ protective device discounts include everything from smoke alarms, door sensors, door cameras, and extensive service-based, third-party monitoring systems.

According to recent studies, more than 80% of burglars first inspect a dwelling for security systems when deciding to break into a home, most of whom will then seek an easier target. Homeowners can expect a nearly 10% discount on their home insurance premiums after installing comprehensive security measures.

2. Upgrade Your Old Roof

Weak or leaky roofs can compromise the interior of a home, allowing for wood rot, water damage, cave-ins, or other complicated problems with high repair costs. Many insurers offer impact-resistant discounts for roof work that protects against lightning or hail and age discounts that apply to any new roof sturdy enough to forestall damage claims indefinitely.  

A new roof can reduce the price of your premiums up to 35%, though installing one can cost upwards of $600 per square foot in materials and labor. While financially recouping your investment might take some time, you may enjoy knowing you have a reliable layer of protection between you and the sky.

3. Replace Outdated Plumbing and Electrics

Insurers offer discounts ranging from 5-35% on your homeowner’s premium upon replacement of outdated plumbing and electrical features. Many old homes utilize steel pipes prone to rust and bursting, which lead to severe flooding and water damage. Likewise, old or slipshod wiring can short out and spark, producing fires capable of engulfing an entire household within minutes. 

Upgrading these necessary home features diminishes the likelihood of a disaster leading to an insurance claim, thus reducing your premiums. Replacement costs can fluctuate by thousands of dollars based on the size of your house and the severity of such issues. On average, rewiring a home costs around $1,800, and replumbing an entire house costs $6,000.

4. Improve Fire Safety 

According to data from the National Fire Protection Association, residential fire sprinklers control home fires 96% of the time, reducing the likelihood of death by 81% and the severity of property damage by 70%. Given such staggering numbers, insurers offer homeowners policy discounts ranging anywhere between 10-60% on properties properly retrofitted with fire control systems.

Installing a new sprinkler system in a home costs around $114 per square foot, which equates to about 1% of a home’s value. While you can measure the benefits of fire safety against potential property damage or insurance cost, remember that nothing outvalues human life. Decent sprinklers can stop or slow a fire long enough to allow building inhabitants ample time for escape.

5. Install Water Shutoff Devices

Over a quarter of loss claims filed in 2016 involved home water damage, with average repair costs reaching nearly $10,000 per case. Homeowners can install digital devices that shut off their water upon detecting defective plumbing for only a couple hundred dollars upfront. Considering the amount these devices save on unfiled damage claims, most providers offer homeowners an average annual discount of 3% for including shutoff devices in their plumbing system.

6. Protect Your Windows

On average, 1 in 40 homes in the US filed a claim for wind or hail damage in 2016, accounting for the highest total amount of all homeowners insurance reports that year. Impact-resistant glass panes with roll-down shutters–aka storm windows–offer the best protection against heavy weather. Costs vary widely depending on your home, but average installation fees fall around $5,000. Insurers offer discounts of up to 15% on annual home premiums for appropriately-retrofitted houses in states with high-wind risk or other hurricane-prone areas.

Not Every Renovation Is Rewarded: Upgrades You Can Consider, But Won’t Lower Your Premiums

While fortifying your house’s safety and security, you may see other sections of your property that need attention. Just remember that not every upgrade will result in lower insurance premiums.

Aesthetic Upgrades

Aesthetic property upgrades like repairing cracked tiling, repaving the driveway, or applying fresh paint will not lower your home insurance premiums, as responsibility for wear and tear maintenance always falls on the homeowner. That said, visually sprucing up your house can increase its value and occasionally produce a safer environment. For example, unsightly cracked tiles in your shower don’t merely lower your property value but can let water seep through the floor, eventually causing severe structural damage.

Efficiency Upgrades

More and more homeowners today have opted into energy-efficient property upgrades that cut down on utility bills and maintain a “greener” home. Common examples include installing solar panels, replacing all light fixtures with LED lighting, and exchanging HVAC systems for more environment-friendly models.  

While most insurers see upgrades of this sort as “personal choices” and will not match them with policy discounts, many federal and state governments offer homeowners financial incentives–typically as rebates or tax credits–for greenifying their homes.

Expanding Your Property

As with the upgrades above, expanding your property by adding a garage, building an extension, or finishing a basement or attic will not lower your premium. On the contrary, new additions to your home will likely increase your insurance rates. A home with more square footage will require additional dwelling coverage  Post-renovation insurance requirements, such as sewer backup coverage for a newly furnished basement, may also apply.

Update Your Policy to See Savings

For policy savings to occur, you must notify your insurer of home upgrades as they occur. Not every renovation gets rewarded with a lower homeowner’s premium, so verify with your insurance provider that all intended upgrades meet discount eligibility before you invest in them. Remember that even projects that do not lower your insurance rates can still significantly improve the safety and value of your home.