8 Home Improvements to Lower Home Insurance Costs

If you haven’t looked closely at your home insurance policy, you could be missing out on significant discounts for home upgrades. Insurers determine homeowners insurance rates using numerous factors, like your home’s age, ZIP code, and building materials. While you can’t change certain things, a few improvements could reduce your home insurance premium.

Installing a new security system, adding smart home features, replacing your roof, and upgrading your plumbing are among the home upgrades that can help you save. Next time you’re looking for a home improvement project, consider these fixes to lower your homeowners insurance rate.

1. Replace your roof

Replacing your old roof might help you lower your homeowners insurance rates because a new roof will better protect against wind damage and reduce the risk of leaks, especially in hurricane-prone areas.

A new roof could lower your rate by 5% to 35%, according to home improvement services site Angi.1 Discounts vary among insurers, but most companies have guidelines for eligible materials based on impact and wind resistance. The Insurance Institute for Business & Home Safety provides shingle performance ratings to help you find the most durable option.

Newer roofs often have better materials and updated features. If you replace your older roof with one more likely to withstand a hurricane or fire damage, you could see lower rates from home insurers. You’ll typically pay between $5,700 and $16,000 for a roof replacement, depending on the roof’s size and the materials used.2

2. Install a home security system

Installing a security system in your home could reduce your insurance rates since it can lead to a lower chance of theft and other vandalism damage to your home. Whether your insurer will reduce your premium depends on the type of system you install, your policy, and whether the alarms go straight to a dispatcher rather than simply alerting you.

3. Upgrade your wiring

If your home has old or outdated wiring, such as knob-and-tube wiring, there’s an increased chance that it could cause a fire and lead to a home insurance claim. Upgrading your home’s wiring can lower your risk and make your home safer. Replacing your electrical panel can also reduce fire risk, potentially lowering your home insurance rate.

Make sure to hire a licensed electrician if you plan to make updates to your home’s electrical system.

4. Upgrade your plumbing

If you live in an older home, you may have outdated cast iron or galvanized steel pipes that are more likely to corrode or rust. Upgrading your old pipes to a modern material, like copper or CPVC plastic, can reduce your risk of leaks and water damage.

Repiping a house costs an average of $1,254, according to contractor services site HomeAdvisor.4 But a plumbing upgrade could lower your home insurance rates or make you eligible for discounts.

5. Install smoke detectors and a sprinkler system

Fires can cause extensive damage to your house and personal belongings. A fire can cause about $3,107 to $51,243 in restoration costs, according to Angi. For example, restoring your kitchen after a fire can cost up to $20,000, depending on the type of damage.5

Insurance companies often provide incentives for installing a sprinkler system or smoke detectors. Sprinkler discounts can be as high as 35%, according to a Home Fire Sprinkler Coalition survey.6 But discounts vary by insurer, so it’s best to check your company’s website or speak to an insurance agent to learn how much you can save.

6. Get rid of your pool

Standard homeowners insurance typically covers swimming pools, but you’ll pay a higher premium if you have one. Home insurance companies consider pools an “attractive nuisance” because having one increases the risk of a lawsuit if someone gets injured while using it.

If you installed a pool in your home, you’re probably not eager to get rid of it just to lower your home insurance premium. But if you inherited a pool and don’t want to deal with the upkeep, filling it in could help you save time and money on maintenance and lower your home insurance costs.

7. Use smart home technology

Devices like doorbell cameras and automatic lights can help you protect your home and keep other costs down. Plus, you can monitor what’s going on while you’re out of town and act quickly if there’s a problem.

Ask your insurer about any discounts for smart technology home improvements. On average, converting your home to a smart home can cost anywhere from $200 to $1,645.7 Your monthly costs may be higher if you have smart home gadgets and active monitoring by a third party.

8. Get automatic water shut-off valves

Water damage and freezing accounted for nearly 28% of homeowners insurance losses in 2022, according to the Insurance Information Institute. The average claim was for more than $13,954, making water damage an expensive fix for insurance companies.8

An automatic water shut-off valve monitors the flow in your home’s pipes or detects groundwater, then shuts off the water supply if it senses any irregularities. Some insurance companies lower your premium upon renewal or offer discounts for these detectors since they can prevent severe water damage. Ask an insurance agent to find out which devices qualify.

Other ways to lower homeowners insurance costs

You have plenty of other ways to lower your insurance costs, including:

• Increase your deductible. If you’re willing to pay more out of pocket, you could see lower rates. Additionally, paying your premium annually might result in discounts.

• Ask about additional discounts. Ask your insurance agent which home insurance discounts you qualify for. In addition to discounts for making home improvements, you could also get loyalty, claims-free, or policy bundling discounts.

• Comparison shop. Use online insurance quote websites to compare companies and get the best deal on your insurance coverage.

• Bundle your insurance policies. Consider combining your homeowners insurance with your car insurance. Many companies offer a discounted rate when you bundle multiple policies.

• Build good credit. A high credit score might result in some savings for your insurance premiums, as most insurers consider your credit history when setting premiums.

4 home improvements that can increase home insurance costs

Not every home improvement leads to lower premiums. In some cases, you might see higher insurance costs due to greater liability or an increase in the market value of your home. Here are some home improvements that might increase your home insurance premiums.

Putting in a pool

Having a swimming pool increases your home’s liability risk. Insurers usually consider pools a safety risk, so you might pay higher premiums after installing one. Some insurers may even refuse to cover your home if you have a pool.9

Adding a home office

You may be surprised to learn that your insurer might not cover your home office and its equipment. Even if it does, coverage is often limited. You might need to increase your coverage, which can lead to higher insurance premiums.

If you run a business out of your home, you might want to consider a home business insurance policy for added protection.

Building an addition to your home

Building an addition typically increases the value of your home, which could result in increased premiums, as the extra square footage increases how much your insurer would need to pay to rebuild it. You probably won’t need a new policy, but you might need to increase your coverage limits.

Upgrading your bathroom or kitchen

Similar to building an addition, remodeling your bathroom or kitchen can increase your home’s replacement cost value — especially if you use high-end fixtures and materials. If your home’s replacement cost increases, your insurer could raise your rates.

Do you need more home insurance coverage after a renovation?

Depending on the extent of your home renovation or improvements, you’ll likely want to increase your home insurance coverage.

For example, a home addition increases your square footage, which means your insurance company would have to pay more to replace your home. Increasing your dwelling coverage limits can help you ensure you have adequate protection in the event of a total loss.

An insurance agent can help you determine whether and by how much to increase your limits.

Factors that affect your homeowners insurance costs

A few common factors affect how much you’ll pay for home insurance, including:

Home improvements to lower insurance FAQs