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Published: Jun 25, 2024 5 min read

Soaring insurance costs have left homeowners with some tough decisions to make. The average home insurance premium increased by more than 20% in 2023, and experts are expecting another 10% to 15% hike this year. In states like California and Florida, where homeowners face a growing number of wildfires, severe storms and other natural disasters, major insurance companies have stopped offering insurance policies altogether.

To offset costs, some homeowners are signing up for risky, high-deductible policies, while others are choosing to not carry insurance at all. Neither solution is ideal.

A home renovation could be an affordable solution if you’re looking for a less drastic option to reduce your insurance costs. Here are a few different options.

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Replace an old roof

Many insurance companies will give you a discount on your monthly home insurance premium if you have a new — or new-ish — roof.

The lifespan of a roof can vary greatly depending on the material used: Clay and cement tiles typically last for 100+ years, but you’ll only get a few decades out of asphalt and wooden shingles. If you don’t know how old your home’s roof is, or what condition it’s in, get an inspection. It may require minor repairs that are easy and affordable to fix.

If your roof is near the end of the road, replace it. The initial investment is high — installing a new one can cost anywhere from $10,000 to $20,000, and sometimes even more — but it’s usually worth it. You’ll save on your insurance premiums and energy costs, and if you plan on selling your house down the road, it’ll make your property more attractive to buyers.

Upgrade critical home systems

Critical systems such as plumbing, electrical and HVAC keep your home running smoothly and efficiently. Neglecting any of these systems can quickly become a safety hazard: Old or frayed wiring increases the risk of accidental fires, outdated water pipes run the risk of breaking and a broken heating and cooling system will have you sweltering in the summer, freezing in the winter and paying a small fortune on utilities.

Replacing these systems with modern versions, like low-flow faucets and energy-star-rated air conditioners, will reduce your water and energy consumption. These updates will also reduce your chances of having to file a home insurance claim, says Ted Olsen, vice president at Goosehead Insurance. “Many insurers will reward their clients with lower premiums or discounts as a result,” he says.

Environmentally friendly updates like installing solar panels, replacing outdated appliances with Energy Star-rated ones and using recycled materials to replace old flooring can also lead to lower premiums, Olsen adds.

Add security features to your home

Insurance companies prefer, of course, to not have to pay out claims for damages and lost property, and many offer discounts to homeowners who install features designed to prevent those things from happening.

Adding a burglar alarm that connects to a third-party monitoring service makes you a less risky customer in the eyes of an insurer. The same goes for fire and smoke alarms that connect directly to emergency services. Even something as simple as installing a deadbolt lock can lower your monthly premium.

If you’re interested in getting comprehensive security for your home, check out our list of the best home security systems for 2024.

Call your insurance provider

Protecting your property is an intrinsic part of homeownership. After all, you don’t want to risk losing a several hundred thousand dollar investment to a freak storm, accidental fire or any other unexpected event.

Many insurance companies are willing to work with homeowners to find ways to reduce their coverage costs. Before starting a renovation project, contact your insurer to see what discounts are available and how much you could potentially save.

Before making any renovations, “it’s important to communicate openly with your agent to guarantee your home stays fully insured through the renovation process,” Olsen says.

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