5 Home Upgrades That Could Slash Your Insurance Premiums

Rising home-building costs and more frequent natural disasters have sent the cost of homeowners insurance skyrocketing over the last few months. Some states have seen premium increases of up to 23% on average, according to the National Association of Realtors.

Many homeowners are seeking ways to cut costs, like shopping around or bundling home and auto insurance. One option many may not have considered is making upgrades to their homes. It sounds counterintuitive, but certain upgrades can make home insurance more affordable. Here are five of them.

Five home upgrades that can lower homeowners insurance premiums

Here's a closer look at five upgrades that could save homeowners money on insurance over the long term:

1. Roof replacement: Roof replacement decreases the likelihood of leaks and damages from high winds. 
2. Replaced home systems: Those who own older homes may see their premiums decrease if they update or replace plumbing, heating, and electrical systems within the home.
3. Sprinklers: Adding sprinkler systems can minimize damages due to house fires.
4. Storm shutters: Those who live in areas at high risk of tornado or hurricane damage could benefit from installing storm shutters, which reduce the odds of broken windows and interior damage.
5. Fire-resistant building materials: Homeowners in wildfire-prone areas can save by using fire-resistant siding or roofing materials on their homes.

There's a common theme here: If the upgrade could reduce the risk of a disaster occurring or mitigate the damages if one occurs, insurers are often willing to offer discounts. These upgrades often reduce the cost of claims, which reduces how much the insurer has to pay to repair the property.

How to take advantage of these discounts

Homeowners typically don't have to do anything to claim homeowners insurance discounts because the insurer applies them automatically during the quote process. But not all insurers offer the same types of discounts. 

Homeowners hoping to be rewarded for one of the upgrades above should focus their search on companies that provide that particular discount. Often, the insurer lists its savings opportunities on its website. But a quick call can clarify whether the company offers a particular discount if the website doesn't say.

Homeowners should keep a few factors in mind when going after these discounts. First, the upgrades mentioned above aren't cheap. Most have substantial upfront costs, so they're probably not worth doing just to save a few bucks on an insurance premium. Homeowners who are already planning to remodel the property or those hoping to preserve it over the long term may find these upgrades more worthwhile. 

The other thing to note is that, while many of the above upgrades come with substantial discounts, more discounts don't automatically guarantee a lower insurance premium. Each insurer has its own formula for calculating risk and it also decides how much each discount is worth. It's still worth comparing rates from a few companies that may not offer discounts for the home features above.

Homeowners who make one or more of the changes above may also want to check with their current home insurer to see if it offers any savings. If it's willing to knock a significant amount off the policy's premiums, it might be to the homeowner's advantage to stay put rather than switch.