9 Home Improvements & Renovations that Lower Home Insurance Premiums
Home renovations add value to your home. But there’s another sneaky advantage: lower homeowners insurance premiums.
Yes, certain home improvements and renovations can lead to a noticeable drop in homeowners insurance premiums.
Here are a few smart upgrades you can make to reduce risk and lower premiums.
Installing a Home Security System
Unsurprisingly, a home security system can lower insurance premiums.
Home security systems reduce your risk of a burglary-related insurance claim. They deter unwanted individuals from accessing your property.
A home security system is a good idea regardless of the impact on insurance premiums. As an added bonus, however, many insurers now offer a decent discount for home security systems (especially if you have a system with a premium subscription and active monitoring).
Upgrading Your Roof
Insurers see old and damaged roofs as risky to insure. In fact, they’re one of the biggest reasons for insurance claim denials and cancelled policies.
When replacing your roof, consider adding a stronger roof to get an insurance discount.
Insurers may offer discounts of up to 20% on weather-resistant roofs, for example, if you live in a disaster-prone region. Insurers in hurricane and tornado-prone areas could significantly lower premiums because a strong roof (like a FORTIFIED Roof, which was developed as part of a government program) that reduces the risk of damage after a windstorm.
Sure, FORTIFIED Roofs and other strong roof systems cost more to install. However, you’ll likely recoup a portion of these costs as lower premiums.
Replacing Old Plumbing
Old plumbing is a common source of major insurance claims.
Outdated pipes made from polybutylene, galvanized steel, or aging copper, for example, could burst or leak with little warning. Some insurers deny coverage on homes with certain pipes. Others raise premiums or cancel your policy after a single water damage claim.
Some of the ways to save money with a plumbing renovation include:
- Upgrading your home’s plumbing system from outdated materials like polybutylene (“Poly B”), galvanized steel, and aging copper
- Installing water leak detection sensors, shutoff valves, or smart moisture monitors
Contact your insurer and ask about discounts. Sometimes, you can avoid a cancelled policy just by installing a water leak detection sensor (or, your insurer may require a sensor in a home with dated plumbing).
Upgrading Electrical Systems
Old electrical systems increase the risk of a house fire. A home with outdated wiring and an overloaded breaker is more likely to have an electrical fire.
If your home hasn’t had an electrical update in decades, insurers may consider it a higher-risk property to insure.
Some of the ways to upgrade electrical systems and save money include:
- Upgrading to modern wiring
- Adding additional circuits
- Installing new breaker panels
- Adding surge protection
The more ways you reduce fire risk, the better your chances of saving money on insurance premiums.
Adding a Fire Prevention System
Fire prevention is about more than just upgrading electrical equipment.
Some of the easy ways to reduce fire risk and qualify for a potential insurance discount include installing:
- Smart smoke detectors
- Sprinkler systems
- Fire-resistant building materials
- Fire extinguishers on every level
- Multiple interconnecting smoke alarms
Improving Home Accessibility & Safety Features
Handrails and improved lighting don’t seem like things that would reduce insurance premiums.
However, handrails, good lighting, and non-slip flooring all reduce the risk of injuries, lowering your liability risk.
Some of the accessibility features that reduce the risk of someone getting hurt on your property include:
Handrails
- Improved lighting
- Non-slip flooring
- Pool fencing
Your insurer may or may not offer a specific discount for these features. However, if they eliminate a single liability claim, they could help you avoid higher premiums in the future – and that’s worth it.
Upgrading your HVAC System
Like a roof, an HVAC system is an expected cost of homeownership. Periodically, homeowners need to spend a significant chunk of money upgrading their HVAC.
Fortunately, your new HVAC system could lead to lower utility bills and cheaper premiums.
A new HVAC system lowers several risks at once, including fire, water leaks, and mold claims.
Smart thermostats and other modern HVAC features can also reduce the risk of a claim, potentially reducing premiums further.
Installing a Generator
A generator can significantly reduce the risk of damage after a power outage.
If a storm knocks out power for a few days in your area, it could lead to frozen pipes (in the winter) or mold and moisture damage (in a hot and humid summer).
Generators help maintain essential systems in your home, including HVAC systems, sump pumps, and home security devices.
Many insurers offer discounts for installing a permanent, professionally wired home generator system. Contact your insurer to check.
Finishing Your Basement (the Right Way)
Finishing a basement can increase premiums (because your home is more valuable and has more space to insure).
However, finishing a basement can also reduce risk, helping to offset the higher premiums.
Some of the reasons finishing a basement can lower premiums include:
- Waterproof flooring to reduce the risk of water damage in the lowest level of your home
- Vapor-resistant insulation to reduce the risk of mold buildup
- Sump pumps with backups to help mitigate any water damage
- Dehumidifiers, proper drainage systems, and other systems to reduce mold growth and water damage
Water damage claims are among the most common insurance claims for homeowners with basements. With smart planning, you could mitigate this risk and avoid a sharp rise in insurance premiums after finishing your basement.
Final Word: Always Tell Your Insurer About Home Upgrades
Whether a renovation raises or lowers premiums, it’s important to tell your insurer about home upgrades.
Home upgrades can change the risk of insuring your home. For better or worse, your insurer needs to know about these home upgrades.
Failing to notify your insurer could lead to a reduced or denied claim. It could mean losing the entire value of your renovation just months after you paid for it.
Tell your insurer about your home upgrade.
And, if you’re dealing with insurance claim headaches post-renovation, contact Ironside Claims for a free claim review. We’re experts at navigating tricky claims.