Top Home Upgrades To Save On Insurance

Many homeowners insurance companies offer insurance discounts for home improvements that lower your chances of experiencing a covered loss, such as installing alarm systems, upgrading to better materials or buying a generator. However, not all home modifications lead to discounts, and renovations that raise your liability risk or the replacement cost of your home could actually lead to higher insurance rates.

Continue reading to learn more about home improvements that lower insurance premiums and how much money you could save by investing in cost-saving home upgrades.

On This Page

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  Install a Home Security System

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  Upgrade to Impact-Resistant Windows or Shutters

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  Replace Your Roof With Modern and More Durable Materials

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  Install Smoke Detectors or a Fire Sprinkler System

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  Upgrade Electrical and Plumbing Systems

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  Add a Backup Generator

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  Install a Water Leak Detection System

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  Bundle Upgrades for Bigger Discounts

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  Insurance Discounts for Home Improvements FAQs

Install a Home Security System

Installing security cameras, motion sensors, smart locks and other home security system components or paying for professional monitoring services will lower the odds that you will need to file a home insurance claim related to vandalism or theft, and it may make you eligible for a discount from many insurers as a result. For example, State Farm customers can lower their home insurance premiums by up to 6% by installing a security system from ADT.^[1]

Upgrade to Impact-Resistant Windows or Shutters

Impact-resistant windows and shutters may make you eligible for a homeowners insurance discount, especially if you live in a region with a high exposure to windstorm and hail damage. When paired with other hurricane damage mitigation measures, impact windows can lead to insurance savings of as much as 45%, depending on your insurance company.^[2]

While investing in hurricane-resistant materials naturally helps you avoid having to pay to replace your windows and shutters themselves, it can also help you prevent other types of unnecessary damage to your home. For example, if your windows are shattered during a hurricane, it could allow rain to enter your home and cause significant water damage — but this damage may be prevented by impact-resistant windows.

Replace Your Roof With Modern and More Durable Materials

Similarly, you can likely save on insurance by upgrading your roof with impact-resistant shingles or other durable materials because the roof is the most expensive part of the home to replace — meaning a stronger roof lowers the odds that you will need to file a costly home insurance claim.^[3] In Florida, insurance companies are required to discount your windstorm insurance premiums by at least 68% if you add a roof covering and secure your roof to your walls.^[4]

Strengthening your roof is also an important part of seismic retrofitting, which refers to the process of improving the connections among the various parts of the structure of your home — including your roof and foundation — to help them withstand the impact of earthquakes. Seismic retrofitting may lead to savings on your earthquake insurance premiums.

For example, the California Earthquake Authority (CEA) offers a discount of up to 25% to policyholders who have their homes retrofitted.^[5]

Install Smoke Detectors or a Fire Sprinkler System

Smoke detectors can alert you to potential fires before they start, while sprinkler systems can put out existing fires before they become severe — both security measures can help you reduce your risk of experiencing a devastating house fire and potentially lead to insurance discounts. For example, AAA offers 5% home insurance discounts for both fire alarms and residential sprinklers to homeowners in California.^[6]

Upgrade Electrical and Plumbing Systems

Outdated electrical wiring or plumbing systems can make your home more susceptible to major fire or water damage, so investing in new wiring and pipes can decrease the chances that you’ll need to file a property damage claim with your homeowners insurance provider. If you have a Farmers home insurance policy, you may be able to cut 2% from your premium by overhauling your electrical system or 6% by replacing your plumbing.^[7]

Add a Backup Generator

If you install a permanent whole-house generator into your home, you may qualify for a 5% homeowners insurance discount from some insurance carriers.^[8] One of the biggest insured losses this can help prevent is water damage from pipes that freeze and then burst, which may be a serious threat if you experience a power outage during the winter and don’t have a generator.

Keep in mind that a portable generator may not be enough to make you eligible for a homeowners insurance discount.^[8]

Install a Water Leak Detection System

Smart home systems that can detect the flow of water and automatically shut off your water valve are crucial for keeping unseen leaks from turning into significant water damage repair bills. On the whole, installing smart home technology will usually lower your homeowners insurance cost by around 5% to 20%, depending on the type of device installed.^[9]

Bundle Upgrades for Bigger Discounts

By completing multiple home improvement projects, you may be able to stack home insurance discounts and secure even bigger savings than you would get with just one project. That said, before you jump into your next home renovation, you should verify whether a given upgrade will decrease or increase your homeowners insurance premiums.

For example, suppose you build a new room that raises your property value but doesn’t serve the purpose of protecting your home from any perils covered by your home insurance. In this case, you likely won’t qualify for an insurance discount, and you may need to raise your dwelling and personal property coverage limits to account for the additions, which could lead to higher homeowners insurance rates.