6 home improvements that could lower your home insurance costs

Thinking of making home upgrades? Some additions to your property could lower your home insurance premiums or earn insurance discounts. But being strategic is key because other kinds of home renovations actually result in higher premiums.

What’s the difference? Insurance companies tend to reward homeowners who invest in safety or security upgrades that reduce the risk of insurance claims. Think new shingles or deadbolts. In contrast, home insurance rates might increase if you introduce anything that could cause injury (like a swimming pool) or add significantly to the home’s value.

Learn more: Homeowners insurance: What it covers and how much you’ll pay

The following upgrades can reward you with insurance savings and enable you and your family to enjoy a safer, more secure home.

There’s a reason insurance providers save some of the most significant reductions in homeowners insurance rates for a roof replacement. While a new roof tends to cost at least $9,000, it can also score you 5% to 35% off your homeowners insurance premiums.

Homeowners living in states prone to frequent storms are likely to see bigger discounts for installing special roofing features like hurricane straps or clips or wind-resistant shingles.

Learn more: How to file a homeowners insurance claim

Upgrades to the electrical wiring, plumbing systems, and even the HVAC system in your house can lower the cost of your home insurance policy. Replacing old pipes reduces the risk of damage from a water leak, while rewiring a home can lower the chance of fire damage.

This is especially true in older homes constructed in the 1950s or earlier, where knob and tube or aluminum wiring is more common, and you may struggle to secure insurance coverage due to the risk of fire.

Learn more: What is umbrella insurance, and why should you consider it?

The discounts for installing home security systems vary and depend on what you’re using to protect your home. For example, a burglar alarm supported by 24/7 professional monitoring is likely to net a larger rate reduction than a doorbell cam accessed from an app.

Keep in mind, you don’t have to buy an elaborate alarm system to earn a discount. Even deadbolts might score you some insurance savings.

Learn more: Is homeowners insurance required? The answer might surprise you.

Protecting against fire, wind, and water damage

According to the Federal Emergency Management Agency (FEMA), shoring up the exterior of your home against the elements is a smart investment. Ask your insurance agent if there are discounts available for any of the following home improvements:

• Installing a sump pump

• Smoke and carbon monoxide detectors

• Automatic water shut-off valves

• Storm shutters

• Sprinkler system installation

• Impact-resistant windows

• Reinforced garage doors

• Hail-resistant siding or shingles

• Hurricane straps

You should also consider property renovations that could potentially reduce the risk of damage to your home, such as fire-resistant landscaping, drainage systems, and tree maintenance.

Learn more: Does homeowners insurance cover wildfires?

Smart home technology isn’t just about convenience or even energy savings. Some smart home devices like smart door locks, motion-sensor cameras and floodlights, or flood sensors could earn you a discount on homeowners insurance.

For instance, Farmers Insurance offers a discount in some states for a connected home system supported by remote monitoring. American Family Insurance has a smart home discount that includes savings for smart thermostats and water-leak and humidity sensors.

Learn more: American Family auto insurance review

In a handful of earthquake-prone areas, something called seismic retrofitting could result in a significant homeowners insurance discount. Earthquake retrofitting involves bolting your house to the foundation, bracing your chimney and water heater, and putting in gas auto shut-off valves.

The California Earthquake Authority advertises a 25% discount on your insurance premiums if your home was built before 1980 and is retrofitted to better withstand earthquakes.

Learn more: Earthquake insurance: Your existing homeowners policy isn’t enough

There are two main reasons a home renovation might raise your insurance costs. Either it increases the risk of injury or it increases the replacement cost of your home. Here are five of the most common home improvements that could result in higher insurance premiums.

While pools, hot tubs, treehouses, and trampolines all sound like fun for the whole family, they’re considered “attractive nuisances” by insurance companies. The increased risk of injury usually translates to homeowners paying a higher cost for liability coverage.

Learn more: What does homeowners insurance cover?

Insurance providers may require installing a locked fence or safety cover on swimming pools and could refuse coverage entirely for pools with diving boards or slides.

While it’s fairly common to work remotely, you may not realize home offices or home-based businesses affect insurance rates. An office in your home can significantly affect your insurance costs, especially if you need additional liability coverage or take out a separate policy.

The Insurance Information Institute states the standard home insurance policy covers loss of equipment for a home office at about $2,500, so you may need to add an endorsement for speciality machinery or expensive inventory stored at your home.

Learn more: What does homeownership not cover

Expanding your living space to accommodate a larger family can also expand the costs of your homeowners insurance. In fact, any time you’re adding square footage (inside or out), you could be increasing the home’s value and, in turn, its replacement cost.

And take care when choosing the materials for your addition or remodel. Even if you’re not technically adding square footage, custom and high-end builds may raise your home’s replacement cost beyond your current coverage.

Solar panels can be a great long-term investment and provide energy resilience during severe weather. But they also add to the replacement cost of your home and thus raise your homeowners insurance rates.

If you’re considering adding roof-mounted panels, those are protected through your dwelling coverage. Freestanding panels or panels on a detached structure or shed may fall under “other structures” (Coverage B) or require an add-on to your homeowners insurance policy.

A traditional, wood-burning fireplace may be the vibe you’re trying to create but it’ll cost you extra in homeowners insurance premiums. That’s because, unlike gas or propane, wood-burning fireplaces and wood stoves carry a greater fire risk.

The increase to your homeowners insurance premiums after a major home improvement project depends on the type of renovation and whether it raised your home’s value or required more liability coverage.

For instance, adding a swimming pool to your property may only cost $50-$75 per year in increased homeowners insurance premiums.

If you recently increased square footage or added significantly to your home or property value, contact your insurance company. Because insurance quotes are based on the replacement cost of your home, it’s in your best interest to make sure any improvements are financially protected.

You may also want to increase your liability coverage during lengthy construction projects in case of injury. If you’re concerned about the costs of increasing coverage, you can explore strategies to reduce your premiums, such as increasing your deductible or bundling with auto insurance.