8 Home Improvements That Can Lower Your Insurance Rates

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Homeowners insurance premiums are rising. They rose by 11.4% between 2017 and 2020, on average, according to the Insurance Information Institute (III). The average annual premium now is $1,398, the industry-backed institute estimates.

If that sounds steep, you’ll be happy to hear about discounts that may help push rates down a bit. Many if not most insurers offer premium breaks when homeowners do certain home improvements that reduce the risk of them needing to file a claim.

Discounts can vary, from 5% to 20%, according to the institute, which provided the estimated discounts for the following projects.

One caution: Before launching into a project that you hope will win you a discount, check with your agent or insurer’s website. Find out which discounts you’re eligible for and what materials and standards are called for. You can compare a project’s cost with the discount to see how much money you stand to save.

If you’ve already made some of these or other improvements, by all means, ask your insurance company — don’t wait for your policy to renew — if you can get a discount for the upgrades.

Discounts focus most on three threats responsible for the biggest percentages of home insurance losses:

  • Wind and hail
  • Damage from water and freezing
  • Fire and lightning

Theft, it may surprise you to learn, is behind just 1% of home insurance losses.

Read on for improvement projects that may result in premium discounts from home insurance companies, keeping in mind that possible discount amounts will vary depending on the project and the insurer.

1. Monitored security service

Home security alarm system
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Monitored home security systems — ADT’s is a familiar example — typically reap nice discounts, says Travelers Vice President Angela Orbann.

These systems link “smart” devices (networked electronics) such as burglar, fire, water and carbon monoxide leak alarms with an always-on human monitoring service that sends help in case of trouble. It’s that guarantee of human backup that makes monitored systems worthy of the greatest discounts.

Ring video-enabled doorbells, for instance, may qualify for a discount when coupled with a professionally monitored security system.

More sophisticated smart home security systems tie alarms to a network that can include a home’s appliances, fire sprinklers, HVAC system, lighting, security cameras, outdoor irrigation and other systems.

Potential discount: Up to 15% to 20%

2. Roof upgrades

Man installing asphalt shingles on a roof
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Your roof is a big, vulnerable structure. Especially in hurricane-prone areas, discounts target projects that tie the roof to the structure.

Wildfire, too, is a threat in some regions, and discounts can reward homeowners who replace their roofing with noncombustible material, says Janet Ruiz, spokesperson for the Insurance Information Institute.

It’s not just wildfire that threatens roofs, though, Ruiz tells Money Talks News. Fires that can start in the kitchen or fireplace can spread through the roof. So, if you are contemplating a roofing upgrade, look for a discount regardless of where you live.

Potential discount: 5% to 20%

3. Home safe

Hand unlocking a safe
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Jewelry and other valuables stored at home are less vulnerable to thieves when they are kept in a safe.

When adding coverage for jewelry or other valuables to your home insurance policy, ask the agent if you can get a discount for storing those valuables in a home safe or a bank safe deposit box, Ruiz suggests.

Potential discount: 5% to 15%

4. Targeted wiring and plumbing upgrades

Worker installing electrical wires
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If you have an older home, you don’t need to replace the entire electrical system to earn a discount. Some companies dangle discounts for rewiring crucial pieces of your heating, plumbing and ventilation systems, Ruiz points out.

Potential discount: Up to 15%

5. Smart detection devices

Washing machine with a water leak
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“The newer discounts include a lot of technology-based discounts,” says Ruiz.

Water sensors, for example, offer a cheap addition to a home’s security, and insurers love them because water leaking from appliances, toilets, sump pumps and roofs is a potent source of damage.

Smart water-leak sensors vary in their features, with prices starting as low as $50. Look for one with a loud, piercing alarm. You can find programmable devices, including those compatible with smart hubs like Alexa.

Electronic gas-leak detectors can earn discounts, too, and you’ll find products that send an alert to your mobile device if they detect a leak.

Take the project to the next level by graduating from sensors to automatic water- or gas-shutoff system, which can shut off your water service automatically if it detects a significant leak.

Potential discount: 5%

6. Basic security devices

Worker installing a dead bolt lock
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Discounts are typically offered for installing these basic home security products, the Insurance Information Institute says:

  • Smoke detectors
  • Burglar alarm
  • Deadbolt locks

Potential discount: 5%

7. Storm shutters and windows

Workers installing windows in a home
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Homes near the coasts in particular may be eligible for discounts for adding storm shutters, impact-resistant windows and other weather-proofing projects, says the Travelers’ Orbann.

She points to the Fortified construction standards that guide homeowners and professionals in hardening homes against hurricane and wind damage, which were recently developed by the Insurance Institute for Business & Home Safety.

Potential discount: 5%

8. Earthquake retrofits

A crack in the wall of a home
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Older homes can be made more resilient to an earthquake with anchoring or bracing.

Potential discount: In California, check the California Earthquake Authority’s information on premium discounts of up to 25%. Elsewhere, ask your insurance agent if discounts are available.

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