After a Home Renovation Consumers Could Save $114 a Year on Average on Insurance Costs
When Americans improve or renovate their homes, the value of their properties often rises. Another financial advantage of home improvements is the reduction in home insurance costs that certain upgrades can provide. According to LowCostInsurance, the average cost of home insurance drops by $114 per year after certain renovations.
Savings from these improvements are small for most people, but LowCostInsurance discovered that depending on location, discounts can amount to as much as one-fifth of the average premium. Savings in ten states total at least 10% of the annual premium.
On average, savings are modest after home renovations — but not always
Spending on home improvement projects increased in 2020 compared to previous years, owing to the COVID-19 pandemic and increased time spent at home. Home improvement projects frequently increase the value of a home, and data shows that certain improvements can result in a reduction in the cost of home insurance — though the savings can be modest for many.
After a series of renovations, the cost of home insurance drops by an average of $114 per year. Despite the fact that large projects can cost tens of thousands of dollars, there is still a financial incentive to undertake smaller renovations. The savings LowCostInsurance estimates are based on:
- Installing more powerful locks
- Installing a lightning rod or other similar protective device on the home's exterior
- Upgrading the home's roof
On average, insurance savings from these home improvement projects amount to 7% of annual insurance premiums. This figure varies according to the insurance company and, ultimately, the location. Annual savings from these renovations equal at least 10% of a family's home insurance premium in ten states.
Following these enhancements, residents in Wyoming, Nebraska, and Texas see the greatest decrease in the cost of homeowners insurance relative to the national average. Without any improvements, savings in all of these states amount to at least 16% of the average household's insurance cost.
State | Average cost | Cost with improvements | Savings as percentage of premium |
Wyoming | $1,391 | $1,118 | 20% |
Nebraska | $2,405 | $1,961 | 18% |
Texas | $2,539 | $2,135 | 16% |
Iowa | $1,371 | $1,160 | 15% |
Colorado | $3,348 | $2,856 | 15% |
Missouri | $1,935 | $1,666 | 14% |
Tennessee | $2,914 | $2,534 | 13% |
South Dakota | $2,021 | $1,814 | 10% |
Minnesota | $2,091 | $1,882 | 10% |
Kentucky | $1,736 | $1,564 | 10% |
Arizona | $1,367 | $1,238 | 9% |
Montana | $2,562 | $2,327 | 9% |
Illinois | $1,360 | $1,246 | 8% |
Michigan | $1,556 | $1,426 | 8% |
New Mexico | $1,469 | $1,355 | 8% |
Kansas | $2,720 | $2,512 | 8% |
Alaska | $1,286 | $1,189 | 8% |
Wisconsin | $1,046 | $973 | 7% |
Maine | $977 | $912 | 7% |
North Dakota | $1,789 | $1,673 | 6% |
Georgia | $1,747 | $1,643 | 6% |
Indiana | $1,194 | $1,126 | 6% |
North Carolina | $1,412 | $1,349 | 5% |
Virginia | $1,587 | $1,518 | 4% |
West Virginia | $1,175 | $1,124 | 4% |
Rhode Island | $1,688 | $1,614 | 4% |
South Carolina | $1,989 | $1,904 | 4% |
New York | $1,518 | $1,455 | 4% |
Ohio | $1,309 | $1,258 | 4% |
Maryland | $1,392 | $1,338 | 4% |
Louisiana | $1,751 | $1,686 | 4% |
District of Columbia | $2,787 | $2,685 | 4% |
Nevada | $1,106 | $1,066 | 4% |
Oregon | $1,217 | $1,174 | 4% |
Mississippi | $1,571 | $1,525 | 3% |
Pennsylvania | $896 | $871 | 3% |
Alabama | $1,874 | $1,824 | 3% |
Idaho | $1,061 | $1,034 | 3% |
Oklahoma | $3,229 | $3,151 | 2% |
Utah | $1,137 | $1,110 | 2% |
Massachusetts | $1,726 | $1,686 | 2% |
Delaware | $787 | $772 | 2% |
Hawaii | $1,097 | $1,077 | 2% |
New Hampshire | $1,337 | $1,315 | 2% |
California | $1,788 | $1,763 | 1% |
Connecticut | $1,652 | $1,630 | 1% |
New Jersey | $1,202 | $1,188 | 1% |
Vermont | $820 | $812 | 1% |
Washington | $1,185 | $1,175 | 1% |
Florida | $1,951 | $1,941 | 0% |
Arkansas wasn't included in this study due to data issues.
Colorado has the highest post-renovation cost decreases in terms of gross savings, with reductions averaging close to $500 per year. A typical family in Nebraska and Texas saves more than $400 per year. However, as the table below shows, these savings are not universal.
Given the small average savings of less than $10 per year, Vermont homeowners may be the least incentivized to remodel their homes by their insurers. At the same time, residents of states with lower-than-average post-renovation savings should shop around and compare the cost of home insurance and discounts from multiple providers. Because insurers assign rates differently, consumers may find a better deal in their area that isn't always reflected in the state's average cost reduction.
State | Difference for renovations |
Colorado | $492 |
Nebraska | $444 |
Texas | $405 |
Tennessee | $379 |
Wyoming | $273 |
Missouri | $269 |
Montana | $235 |
Iowa | $211 |
Minnesota | $210 |
Kansas | $208 |
South Dakota | $207 |
Kentucky | $173 |
Michigan | $129 |
Arizona | $128 |
North Dakota | $116 |
Illinois | $114 |
New Mexico | $114 |
Georgia | $104 |
District of Columbia | $102 |
Alaska | $97 |
South Carolina | $84 |
Oklahoma | $78 |
Rhode Island | $73 |
Wisconsin | $72 |
Virginia | $70 |
Indiana | $68 |
Maine | $65 |
Louisiana | $65 |
North Carolina | $64 |
New York | $62 |
Maryland | $54 |
Ohio | $51 |
West Virginia | $51 |
Alabama | $50 |
Mississippi | $46 |
Oregon | $43 |
Nevada | $40 |
Massachusetts | $40 |
Utah | $27 |
Idaho | $27 |
California | $25 |
Pennsylvania | $25 |
New Hampshire | $22 |
Connecticut | $22 |
Hawaii | $20 |
Delaware | $16 |
New Jersey | $14 |
Washington | $10 |
Florida | $10 |
Vermont | $8 |
Arkansas wasn't included in this study due to data issues.
Most people don't need to put off getting a pool strictly for insurance concerns
Some customers may be concerned about the impact of installing a swimming pool on their homeowners insurance rates. Most homeowners insurance policies not only cover swimming pools (with some exceptions), but adding a pool adds only a small amount to most premiums as long as the property owner hasn't had any personal liability claims made against them.
On average, a swimming pool raises a homeowner's insurance premium by $12 per year.
The additional cost to home insurance for swimming pool owners is only $1 per month on average, but this charge varies by location, as with other aspects of insurance. For example, in Tennessee, the most expensive state for owning a swimming pool, installing a pool increases a policy's cost by $99 per year. While Tennessee is the most expensive state for a pool, and the only state where insurance costs more than $50 per year, Rhode Island, California, Idaho, and Missouri round out the top five most expensive states for a pool.
State | Cost of adding a swimming pool |
Tennessee | $99 |
Rhode Island | $46 |
California | $39 |
Idaho | $33 |
Missouri | $32 |
Ohio | $26 |
Mississippi | $26 |
Massachusetts | $23 |
Washington | $23 |
Oregon | $21 |
Utah | $19 |
Indiana | $18 |
Pennsylvania | $18 |
Oklahoma | $16 |
New York | $16 |
Michigan | $14 |
Montana | $13 |
Maine | $13 |
North Dakota | $13 |
West Virginia | $13 |
North Carolina | $12 |
Illinois | $11 |
Connecticut | $7 |
New Hampshire | $7 |
Georgia | $6 |
Iowa | $3 |
Virginia | $3 |
Wisconsin | $3 |
Kansas | $2 |
Colorado | $1 |
Nebraska | $1 |
Nevada | $1 |
New Jersey | $1 |
South Dakota | $1 |
Texas | $0 |
Wyoming | $0 |
Minnesota | $0 |
Kentucky | $0 |
Arizona | $0 |
New Mexico | $0 |
District of Columbia | $0 |
Alaska | $0 |
South Carolina | $0 |
Louisiana | $0 |
Maryland | $0 |
Alabama | $0 |
Hawaii | $0 |
Delaware | $0 |
Florida | $0 |
Vermont | $0 |
Arkansas wasn't included in this study due to data issues.
It is common for pools to have no cost increase. There are 16 states where insurers charge no extra fees for homeowners who install a pool. Arizona, Florida, and Texas are examples of states where temperatures are frequently high and pools are common.
States where adding a pool adds $0 to the cost of home insurance
- Texas
- Wyoming
- Minnesota
- Kentucky
- Arizona
- New Mexico
- District of Columbia
- Alaska
- South Carolina
- Louisiana
- Maryland
- Alabama
- Hawaii
- Delaware
- Florida
- Vermont
Pools incur no additional insurance costs in these states, implying that their presence may be priced into the cost of a policy in some areas where they are extremely common. In the case of Alaska, insurers may believe that pools are so uncommon that they do not warrant a markup.
Coastal residents could see some initial savings after hurricane-proofing their homes, but larger savings may come later
Homeowners who reinforce their homes to prevent storm damage save an average of $42 per year on home insurance premiums in coastal states that have had at least one Federal Emergency Management Agency (FEMA)-designated hurricane disaster from 2010 to 2021.
Property owners in Georgia could save the most money by installing storm windows and converting the connectors that connect their roof to their home's walls to hurricane ties. Georgians who choose not to completely renovate their homes but make hurricane-proofing modifications could save an average of $95 per year on their home insurance.
State | Savings from hurricane-proofing |
Georgia | $95 |
South Carolina | $71 |
New York | $70 |
Rhode Island | $59 |
North Carolina | $59 |
Maine | $55 |
Texas | $54 |
Louisiana | $54 |
Maryland | $51 |
Virginia | $48 |
Connecticut | $44 |
Massachusetts | $43 |
Mississippi | $35 |
Alabama | $20 |
New Jersey | $15 |
Delaware | $9 |
New Hampshire | $9 |
Florida | $4 |
Hawaii | $0 |
Arkansas wasn't included in this study due to data issues.
Most states do not significantly increase the cost of homeowners insurance for policyholders who make hurricane-proofing improvements to their homes. While the payoff may be more visible in some areas compared to the statewide average, hurricane-proofing also provides long-term benefits that may be obscured by the direct savings.
Homeowners can lessen the power of weaker storms to cause damage to their homes by equipping their homes with hazard-mitigation devices. If successful, these efforts could eliminate the need for claims and, as a result, keep rates lower over time.
Methodology
Before and after a series of home renovation projects, LowCostInsurance gathered rate information for more than 1 million homes in every state except Arkansas. The following items were included in a fully renovated home:
- A recently renovated roof
- Lightning protection devices are installed on the exterior of the home.
- Deadbolts are installed on doors.
- A deck attached to the house
- A swimming pool
We conducted a separate analysis to see how strengthening a home against hurricanes would affect the cost of insurance. A renovated home included a new roof, hurricane ties, and impact-resistant glass windows without any of the previously mentioned add-ons in areas that experienced at least one FEMA-designated hurricane disaster from 2010 to 2021.
The insurance rate data used in LowCostInsurance analysis came from Quadrant Information Services. These rates were obtained publicly from insurer filings and should only be used for comparison purposes, as your quotes may differ.