Home Improvements That May Affect Your Homeowners Insurance

By Sam Jarman

Homeownership is a rewarding experience, but it also comes with many responsibilities, including maintaining your property. Home improvements are a fantastic way to enhance your home’s value, comfort, and safety, but they can also have significant implications for your insurance premiums. Whether you’re adding a new extension, revamping your landscaping, or installing a high-tech security system, understanding how these changes impact your insurance is crucial. Let’s look at the home improvements that can lower or increase your homeowners insurance.

Home Improvements to Lower Insurance

Certain home improvements can enhance the value and functionality of your home and potentially reduce your insurance premiums. If you want to know how to lower home insurance, here are some key upgrades that might make a difference.

Renovating or Replacing Your Roof

The roof is one of the most critical components of your home, and renovating or replacing your roof can greatly impact your homeowners insurance. Insurance companies often provide discounts for homes with new roofs because they are less likely to suffer from leaks or structural damage. Materials matter, too. Opting for impact-resistant shingles or fire-resistant materials can further reduce your premiums.

Should I tell insurance about the new roof? Yes! Be sure to inform your insurance provider about the new roof and ask about any available home insurance discounts.

Upgrading Your Wiring or Plumbing

Old or outdated electrical wiring and plumbing systems can be hazardous and are more prone to causing fires or water damage, leading to costly insurance claims. Upgrading your wiring to meet modern safety standards and replacing old plumbing with new, durable materials can make your home safer and reduce your insurance costs. Insurance companies view these updates as risk-reducing measures, which can translate into lower premiums. Always use licensed professionals for these upgrades to ensure they meet all safety codes and regulations.

Adding Security Systems and Sprinklers

Enhancing your home’s security and fire protection can also positively impact your homeowners insurance. Installing a comprehensive security system with alarms, surveillance cameras, and motion detectors can deter burglars and reduce the likelihood of theft, which could earn you a discount on your insurance. Similarly, adding fire sprinklers and smoke detectors can mitigate fire risks, potentially lowering premiums. Some insurance companies offer substantial discounts for homes with advanced security and fire prevention systems, so it’s worth exploring these options.

Revamping Your Landscaping

Improving your landscaping can enhance your home’s curb appeal and create a more enjoyable outdoor space. Interestingly, certain landscaping upgrades can also help lower your homeowners insurance premiums. Here’s how:

• Fire-resistant landscaping: In wildfire-prone areas, using fire-resistant plants and materials can reduce fire risk, potentially qualifying you for insurance discounts.
• Proper drainage systems: Effective drainage systems, like French drains and rain gardens, prevent water damage to your home’s foundation, which can lead to premium reductions.
• Security enhancements: Installing motion-sensor lighting, trimming shrubs, and adding fencing can deter burglars and possibly earn security-related insurance discounts.
• Tree maintenance: Regular trimming and maintenance of trees reduce the risk of storm damage, which may lower your premiums.

Home Improvements That Can Increase Insurance

While some home improvements can lower your homeowners insurance premiums, others might actually increase them. This is often due to the higher costs associated with replacing or repairing these new features, as well as the additional risks they may introduce. Here are some key upgrades that could lead to higher insurance costs:

Building a Swimming Pool

Adding a swimming pool to your property is a popular home improvement that can provide endless enjoyment and boost your home’s value. However, it can also impact your homeowners insurance. Pools are considered high-risk features due to the potential for accidents and injuries, which can result in liability claims. Because of this possibility, insurance companies may increase your premiums to account for this added risk.

Additionally, you might need to increase your liability coverage to ensure adequate protection. Installing safety features such as fencing, pool covers, and alarms can help mitigate some of these increased costs, so consult with your insurance provider for specific recommendations.

Building on an Extension

Expanding your home by adding an extension can offer more living space and enhance your property’s overall value, but this type of improvement can also lead to higher insurance premiums. The increase is primarily due to the higher replacement cost associated with the larger footprint of your home. More square footage means more materials, labor, and time needed to repair or rebuild in case of a covered loss. Before starting your expansion project, contact your insurance provider to discuss how the new addition will affect your policy and what adjustments might be necessary to ensure complete coverage.

Upgrading Your Kitchen or Bath

Kitchen and bathroom renovations are among the most popular home improvements that can substantially increase your home’s value, but you may see an increase in your insurance premiums. High-end materials, new appliances, and modern fixtures add to the overall replacement value of your home, which can result in higher insurance costs. For instance, installing granite countertops, custom cabinetry, or luxury showers can elevate the cost of repairs in case of damage. Make sure to update your insurance policy to reflect these enhancements, so you have adequate coverage.

Frequently Asked Questions

Do I need to tell my insurance company about renovations?

Yes, it’s important to inform your insurance company about any renovations or home improvements. These changes can affect the replacement value of your home and may alter your insurance premiums. For example, building an extension or upgrading your kitchen increases the home’s value, which could result in higher premiums. On the other hand, improvements like upgrading your wiring or adding security systems might qualify you for discounts. Not informing your insurer about renovations could result in inadequate coverage or complications during a claim.

How else can I lower my home insurance?

There are several strategies to lower your home insurance premiums:

• Discounts for safety improvements: Many insurance companies offer discounts for home safety enhancements, such as installing security systems, smoke detectors, and fire-resistant materials. Upgrading your plumbing or electrical systems can also reduce risks and potentially lower premiums.
• Bundling policies: Consider bundling home and auto insurance. Many insurers offer significant discounts for customers who bundle multiple policies.
• Increasing your deductible: Opting for a higher deductible can lower your premium. However, be sure you can afford the higher out-of-pocket cost if you need to make a claim.
• Loyalty discounts: Some insurers offer discounts to long-term policyholders. Ask your provider if they have any loyalty programs.
• Improving credit score: In many areas, a better credit score can lead to lower insurance premiums. Regularly check your credit report and take steps to improve your score.
• Home maintenance: Regular home maintenance, such as trimming trees, ensuring proper drainage, and maintaining the roof, can reduce the likelihood of damage and claims, which can keep your premiums lower.

Conclusion

By understanding how different renovations and upgrades affect your insurance, you can make informed decisions that benefit both your home’s value and your wallet. Always consult with your insurance provider and explore potential discounts before undertaking major projects to make sure you’re sufficiently covered.

If you’re looking for an insurance provider that understands the nuances of home improvements and offers competitive rates and comprehensive coverage, consider Mercury. Get a quote from today and see how you can save on your homeowners insurance.

Contact us today for a fast, free quote!