This Home Upgrade Reduced Our Insurance Costs

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Is it an upgrade worth considering?

Key points

• We have property insurance on my husband’s office.
• He recently put a new roof on the office building.
• This reduced the amount we were paying for insurance.

My husband and I own his office building, which is actually an office below and a home above. We have property insurance on the office building to protect our investment in it. And we pay premiums for that insurance so we can get the coverage that we need.

Not too long ago, we upgraded his office building by undertaking a big project. Once we let our insurer know about the change, it reduced our insurance premiums. Here’s why. 

We cut our home insurance premiums with this update

The big change that we made to my husband’s office involved putting a new roof on the building. The roof was around 30 years old and was starting to develop a leak so we put a brand new one on. 

Making this change saved us around 15% on our home insurance premiums. Depending on the circumstances, putting on a new roof can reduce premium costs between 5% and 35% in most cases. That’s because the roof protects against damage to the interior, and when the roof gets older, it cannot do that effectively. 

When a roof becomes too old, many insurers will actually refuse to provide coverage to the house or will require the homeowner to upgrade it. Our insurer wasn’t mandating this yet, but we decided to take action on our own to update the roof and the insurer dropped our costs after we let them know we had made this move.

The reason the insurer reduced our costs is because the new roof was newer and made of better, more durable material that was able to withstand storms and that was less likely to allow compromising leaks. Insurers set premiums based on the risk of a claim and adding a new roof reduced the chances that something would go wrong that our insurer would ultimately have to pay for. 

Many home improvement projects can affect your insurance costs 

Adding a new roof is just one of many changes that could end up impacting the cost of home insurance.

In some cases, modifications to a property will reduce premiums — which is what happened in our situation. Other changes that could end up lowering the cost of insurance could include adding better windows, adding a fire sprinkler system, putting in an alarm system, or installing hardwired smoke detectors. 

In other circumstances, however, home modifications could actually lead to higher insurance costs if they increase the likelihood a claim will be made. Putting in a swimming pool, for example, can result in higher insurance bills not just because the insurer must begin covering the pool in case something happens to it, but also because the pool increases the chances a liability claim will be made. 

Before making any major changes to a home, it’s a good idea to talk with an insurer and get some information about how insurance premiums could be impacted. When the cost of homeowners insurance will drop, it can help offset the expense of the upgrade. But when the reverse is true, it’s important to take this additional ongoing cost into account. 

In our case, we needed a new roof to protect the value of our property, but it ultimately helped us save money on home insurance — which was a big added bonus.