You might want to consider upgrading your home after living there for a while. Home improvements make your home more comfortable and may lower your home insurance premiums in some cases.

But some home renovations can actually cause your home insurance premiums to increase. Learn more about which home improvements you can make to reduce your home insurance costs.

4 home improvements that can lower home insurance costs

Certain home improvements, such as replacing your roof, can reduce the chances that you’ll end up with damages. And you might be able to save money on your home insurance policy as a result of lowering your home’s risk. Check with your insurance company to understand what kind of discounts, if any, you could receive for upgrades before going ahead with any improvements.

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Installing 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.

Upgrading your home’s systems

Upgrading your home’s systems may help reduce your home insurance premiums and could even increase the value of your home. Check your electrical system, your plumbing, and HVAC system to see if they could use upgrades, and talk to your insurer about what discounts it offers for home improvements.

Adding water leak sensors or a sump pump could also help you lower your premiums since these can help reduce the likelihood of water damage insurance claims. Smoke detectors, fire extinguishers, storm shutters, and other safety upgrades can also help reduce the amount of damage sustained during a fire or natural disaster.

The average cost to upgrade your home’s wiring can be between $10,000 and $30,000, according to HomeGuide, so weigh the costs and benefits before upgrading.^[2] On the other hand, a sump pump only costs around $1,000 on average to install.^[3]

Replacing 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.

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 can expect to pay between $5,700 and $16,000 for a roof replacement, depending on the roof’s size and the materials used.^[4]

Using 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 is likely to cost around $835.^[5] Your monthly costs may be higher if you have smart home gadgets and active monitoring by a third party.

Read More: Top 12 Home Insurance Discounts

3 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, according to the National Association of Insurance Commissioners.^[6]

Check Out: Pool Safety Tips for Homeowners

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.

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.

Learn More: Home Renovation Insurance: Best Homeowners Insurance During Remodeling

Factors that affect your homeowners insurance costs

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

• Square footage: The size of your home is one of the main factors that affect your home insurance costs. A bigger home generally costs more to replace and rebuild, so you’ll typically pay more to insure it.

• Location: Another key factor that insurers consider when setting insurance rates is where you live. Some ZIP codes may have a greater risk of severe weather, theft, or flooding, so insurers factor that into your policy’s cost.

• Age of your home: Older homes might cost more to insure than newer ones, especially when they have outdated systems. Insurers usually consider factors like old electrical wiring, plumbing, roofs, and more when setting home insurance premiums.

• Other issues: Many other factors affect home insurance premiums, including whether you have certain dog breeds, a swimming pool or trampoline, a home office, or anything that might be considered a hazard.^[7]

Other ways to lower homeowners insurance costs

Rest assured, 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.

• 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 when setting premiums.

• Make other home improvements. Upgrades like solar panels, a water shut-off device, and a home surveillance system are low-cost ideas that can help you save on insurance.^[8]

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Do you need more homeowners insurance coverage after making home improvements?

It’s smart to contact your insurance agent when you make changes to your home. Some changes may increase your home’s value, resulting in higher premiums. Other changes, especially ones designed to protect against inclement weather or increase your home security, might result in lower premiums.

See Also: Does Homeowners Insurance Cover Home Improvements?

Home improvements to lower insurance FAQs