Homeowners Insurance Discounts Through Home Improvement

As a homeowner, the process of remodeling or upgrading your home to carve out your personal corner of paradise can be a fun, but expensive hobby. Before you rush off to find the perfect backsplash or your dream cabinets, think about how the improvements you make impact your homeowners insurance premium.

The average cost of home insurance in the U.S. is $1,211 a year. Your insurance rate is determined by factors like location, the state of your credit score and your home’s value. In fact, perceived risk is the main factor that will influence your insurance rate. Home improvement projects are seen as a way to lower your risk for filing a claim. So anything you do to try and protect your home can potentially translate into a discounted rate.

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    When most people plan home improvements, their home insurance isn’t on the top of their list –– though it should be. Undeniably, the renovations that typically qualify for a homeowners insurance discounts are less glamorous, but translate to money in your pocket. And when it comes to homeownership, every penny is important.

    Here are some of the projects to keep in mind when considering home improvements that can help pay you back in homeowners insurance discount.

    Exterior home improvements


    A new roof doesn’t sound as fun as redecorating, but replacing your roof can have the biggest impact on your home insurance rate. When insurance companies inspect your home, they’ll take into account the age of your roof to assess your risk of filing a claim.

    If your roof is 10 or more years old, it’s considered a substantial risk by many insurance companies, says McCall Robison, who manages a home blog for Best Company that regularly focuses on cutting insurance costs and home improvements. “This results in higher premiums on your homeowners insurance. Roof issues are the main cause of water damage and leakage, so your homeowners insurance will heavily consider a sturdy roof as a worthwhile discount on your premiums.”

    If you live in an area prone to heavy snow, rain or disasters (hurricanes or tornadoes), replacing or reinforcing your roof with more robust material makes the most sense. Discounts for replacing your roof can range from 5% to 35% off your insurance bill.

    But replacing your roof is an investment and won’t translate instantly into savings, given its upfront costs. According to the 2017 Census, the average cost of getting your roof professionally replaced costs around $6,800. If you have the knowledge and time to replace your roof, you can maximize your savings by replacing it yourself for approximately $2,200.

    RoofingProfessionalDo-it-YourselfAbsolute $ Saved
    Median Expenditures$6,8002,200$4,600
    Source: 2017 U.S. Census American Housing Survey


    If you live in a disaster-prone area, you can get additional discounts if you install shatterproof windows and storm shutters. From an insurer’s perspective, these precautionary changes provide protection during a disaster and result in a reduced premium. Homeowners are most likely to get the largest discount for these improvements in Florida, Mississippi, North Carolina and Louisiana.

    Unlike a new roof, replacing your windows is considerably more affordable and will earn you a 10-15% credit on your insurance. With an average cost of around $2,300 if installed professionally and $500 if you do-it-yourself, adding shatterproof windows to your home is an easy way to lower your home insurance bill.

    WindowsProfessionalDo-it-YourselfAbsolute $ Saved
    Median Expenditures$2,300$500$1,800

    Install an emergency generator

    A generator will ensure that the appliances and home systems that require power still run during a power outage. Installing a generator in your home will save a few dollars on your insurance and help prevent expenditures on additional losses. Think of your generator as a barrier to further damage. It will save you from burst pipes during freezing cold weather and redoing floors when the pipes leak.

    The amount of the insurance discount related to the generator installation varies, but can be anywhere from four percent to 10 percent, says Robison. And as a bonus, installing an emergency generator will also increase your home’s resale value.

    Interior home improvements

    Plumbing and pipes

    Do you own a home that was built in the late 1800s or early 1900s? Even if it was updated in the 1940s or 1950s, the plumbing and electrical are still several decades old, says Jim Hyatt, senior vice president of personal lines at Arbella Insurance Group. Older homes are known for leaky pipes and faulty plumbing, which are considerable risks for insurers.

    If your plumbing is outdated, you’re most likely paying a pretty high rate for your home insurance. Pulling out old pipes and updating to meet current standards is another good way to trim your insurance bill. Updating the plumbing in your home is an intricate and demanding undertaking. If you have the skills and knowledge to install it yourself, you could save as much as $800 compared to what professional installation costs.

    Water FixturesProfessionalDo-it-YourselfAbsolute $ Saved
    Median Expenditures$700$250$450

    Median Expenditures$1,000$200$800

    Water Pipe RemodelProfessionalDo-it-YourselfAbsolute $ Saved

    Electrical wiring

    Just as outdated plumbing in your home is seen as a flood risk to insurers, deteriorating wiring is a fire hazard that will raise your rate. Replacing major household systems like wiring, fuse boxes and breaker switches is a big commitment and will take time. But the decreased risk and home insurance savings make this upgrade well worth it. Similar to replacing your pipes, you’ll be able to save around $700 if you opt to do-it-yourself.

    Electric WiringProfessionalDo-it-YourselfAbsolute $ Saved
    Median Expenditures$1,000$300$700

    Security system

    Home security systems are a no-brainer for most homeowners. There are 2.5 million burglaries annually, with 66% of them being home break-ins. While home security systems will not have as significant of an impact on your rate as a new roof would, it still makes a considerable difference. Insurance companies will provide credits ranging from five to 10 percent for homeowners with security systems, says Hyatt.

    You will get a discount for installing a home security system, though some will earn more of an insurance reduction than others. To maximize the discounts that your provider offers, your home security system typically must include central monitoring that’s connected to emergency services. Today, security systems include everything from sensors in your basement or near your water heater to detect water leaks to monitors that let you know if your pipes are freezing.

    “Security systems are a great way to deter burglaries, but the bigger risk is fire and water,” says Hyatt. “Water is the other top cause of people having disasters happening to their homes. A lot of alarm systems 20 to 30 years ago were just burglar and fire alarms. Today it’s more common to also have water leak detection systems.”

    Yard improvements


    Installing fencing around your property will cut down on potential liability lawsuits, especially if you have attractive nuisances like pools, trampolines, or swing sets. Features like pools and hot tubs will inflate your homeowners insurance rates, so installing fencing can help offset your home insurance bill.

    Having fencing professionally installed in your yard can cost around $2,600, one of the more expensive home improvement projects you can take on. Though installing fencing yourself is substantially more affordable at $601.

    All data cited is from the 2017 U.S. Census American Housing Survey.

    We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Taylor Leamey

    Personal Finance Reporter

    Taylor Leamey is a personal finance reporter at The Simple Dollar who specializes in personal loans, student loans, mortgages, renters, and financial policy. Her reporting has also been featured at CreditCards.com, Interest.com, Reviews.com, MyMove.com, and elsewhere.

    Reviewed by

    • Andrea Perez
      Andrea Perez
      Personal Finance Editor

      Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.