If you're trying to reduce your home insurance premiums, consult your insurance provider before making any renovations to your home. Each insurance company will take different factors into account when determining how much of a risk insuring your home will be – if you upgrade your home without asking your insurance provider first, you may end up paying more in premiums since your home has gone up in value while risk of catastrophic loss has not been sufficiently decreased in the eyes of your insurer.
1. Install Smoke Alarms and a Security System
Because fire and theft represent two of the most common sources of home insurance claims, taking steps to prevent them can reduce your home insurance premiums. This is an inexpensive upgrade that helps to keep your family safe while making your home more attractive to buyers.
Smoke alarms should be present in the kitchen and in every bedroom. Installing a linked fire detection system (often part of home security packages) so that one smoke alarm going off will set off all the others in the home is an extra layer of protection. This is particularly important in two-story homes where you may not hear a downstairs smoke detector going off.
Security systems that sound an alarm whenever an intruder breaks in to your home helps to reduce theft and keeps your family safe. However, smaller security upgrades can reduce your monthly premium as well. These include installing a deadbolt on your front door and making sure any patio doors lock securely and are made of impact-resistant glass. Contact your home insurance company to see what home security discounts they offer, as small security upgrades can make a large difference in your monthly premium.
2. Increase Your Roof's Storm Resistance
Severe storms, hurricanes and hail can easily destroy older roofs that lack the strength of modern roofs. If this happens during a storm, your home insurance claim will be a catastrophic one – not only is your roof destroyed, but you're likely to have significant water damage in the interior of your home. By replacing your roof so that it is less likely to fail in a storm, you can significantly reduce your home insurance premiums.
One caveat is that impact-resistant roofs meant to resist hail or debris from a windstorm will appear damaged long before they lose structural integrity. Repeated hail or debris can create a pitted appearance in your roof, but your insurance company won't pay for a replacement since it is still structurally sound. This has the risk of lowering your home value unless you replace the storm-resistant shingles yourself.
3. Update the Electrical Wiring and Plumbing in Your Home
If your home uses galvanized steel pipes in its plumbing or uses aluminum wiring in its electrical system, it may be time for an upgrade.
Galvanized steel pipes are prone to corrosion – this eventually wears a small hole in the pipe and allows water to slowly leak out. This is a major source of water damage claims. Replacing your galvanized steel pipes with PVC reduces the risk of water damage and your insurance premiums.
Aluminum wiring in your home is a major fire hazard. When aluminum is exposed to air, it eventually rusts and forms aluminum oxide. While aluminum is a conductor, aluminum oxide is an insulator – this means that electrical current passing through the wire will cause the aluminum oxide to heat up. Sometimes it can become hot enough to cause house fires. Replacing the wiring in your home with copper reduces your risk of house fires and can reduce your insurance premiums.
In addition to making your home safer and increasing your home's value, these home upgrades can save you money every month on your home insurance premium. Contact your home insurance provider for more information on how they take these safety upgrades into account when rating your home for risk before doing any renovations to ensure that you save money.
