8 Home Improvements That May Lower Your Insurance

Marwa Hasan
Written by Marwa Hasan
Updated February 18, 2022
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  • Updates that protect your home can result in an insurance discount.

  • Homeowners’ insurance costs an average of $1,095 annually.

  • Staying current with new building codes ensures lower insurance rates.

  • Some major systems upgrades can save you up to 20%.

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If you’re considering making some home improvements—like upgrading wiring or replacing windows and doors—wouldn’t it be great to get the best ROI? While many home renovations can increase the value of your home, some can also help reduce your home’s insurance premium by up to 20%. This could add up to $250 annually based on average premium costs.

Homeowners' insurance costs an average of $1,095 annually across the U.S., but this number varies from state to state. For example, homeowners in Texas pay an average of $1,837 on an annual policy, while in Utah, they pay around $609.

1. Home Security System

A home security system is one of the most effective and straightforward ways for homeowners to secure a discount. Home security systems may include door sensors or centrally monitored systems that automatically notify emergency units if a problem arises. Installing a home security system costs $280 to $1,090.

The amount of money you save on your insurance depends on the type of system and the insurer. Some companies offer up to 5%, while others provide a significant discount for more sophisticated systems monitored by a third party. Before installing a home security system, contact your insurer to get more details about system requirements so that you can net the most savings.

2. Fire System Upgrades

Smoke and CO2 dioxide detectors are a wallet-friendly investment to install for your protection and to reduce insurance fees. Installing a sprinkler system can get as much as 15% to 20% in insurance premium discounts. 

Some homeowners opt for a centrally monitored fire alarm system. This means that even if you're not home, it notifies emergency dispatch to send a fire truck when the fire alarm goes off. This added protection should also provide a discount on your home insurance quote.

3. Plumbing System Improvements

If you have an older home, it might have outdated plumbing materials, such as lead, clay, or galvanized piping that rust. Not only are these pipes generally no longer up to code, but they can also inconveniently crack under extreme temperatures or not be able to handle modern home requirements, which may cause flooding and sewer back-ups.

Replacing old water pipes with more modern copper or PEX supply lines and PVC-ABS drains will positively impact both your peace of mind and insurance premiums. The average cost to upgrade your plumbing pipes throughout an entire home is $1,500 to $15,000.

If you live in a flood-prone area, installing a sump pump with a battery backup can protect against flooding damage and grant you additional insurance discounts.

Insurance companies also offer discounts for water leak sensors and automatic shutoff devices. Adding an emergency water shutoff device reduces the likelihood of damage in the event of a broken pipe or flood.

4. Electrical Wiring Updates

Old electric aluminum or knob-and-tube wiring is not well-suited for modern home devices or appliances, making it outdated and risky from an insurer’s perspective. Upgrading your electrical to copper wiring will make future home improvement projects easier, keep your home operating safely and smoothly, and help you save on your home insurance premium.

Some insurance companies also offer discounts for installing an automatic generator, which keeps the lights on and home systems running if a power outage happens.

5. Roof Repairs or Replacement

Worker doing roof repair
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A bad roof is susceptible to storm damage, and if your roof leaks, water damage, rotting wood, and interior damage can be costly for insurers to repair. A worn-and-torn older roof presents a significant amount of liability, so repairing or replacing your old roof will protect your belongings, increase your home’s value, and significantly reduce your home insurance premium. It could also help you save energy, making your home more watertight and energy-efficient.

6. Deadbolt Locks

Give your exterior doors some added protection with deadbolt locks. This low-cost upgrade will help you sleep easier at night and benefit from extra savings when insurers cut up to 10% off your premium—depending on the lock grade. When selecting new deadbolts, avoid grade 3 deadbolts, as they are the weakest.

7. Wind Retrofitting

Wind and hail are the number one cause of damage in states like Ohio and Texas—according to the Insurance Information Institute (III). III reports that 1 in 40 homes has a claim in this category each year. 

One of the significant upgrades you can make, if you live in a wind-prone area, is adding storm-safe windows with impact-resistant glass and storm shutters. Wind-proof discounts may vary widely and only be applicable if you live in a state with high-wind risk or meet specific retrofit requirements. However, these repairs can help you get a 10% to 15% discount while saving you thousands in possible repairs should a bad storm come through your neighborhood.

8. Home Smart Devices 

Smart home gadgets don't just make life easier—they also help save on your energy bills and make your home safer and more efficient. Many smart additions that make your home more safe and secure, such as installing a smart lock, video doorbell, smart thermostat, or security system accessories, are rewarded by some insurance companies in the form of a discount or credit.

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