Here’s What Every Homeowner Should Know Before Starting a Project
Home improvement projects are exciting—but did you know they can directly affect your homeowners’ insurance premiums?
Some upgrades reduce your risk and earn you discounts. Others add value or liability, potentially increasing your rate. Before you grab a hammer or hire a contractor, it’s worth understanding which changes could save—or cost—you.
Renovations That May Lower Your Premium
1. A New Roof (Up to 22% Savings)
If you’re only going to make one big home improvement, start at the top. Replacing an old roof with a new, impact-resistant one (like metal) can save you big—up to 22%, in some cases.
“Hands down, the biggest premium drop we see comes from a roof upgrade. For many Colorado homeowners, it’s one of the smartest investments they can make.”
— Chris Mitchell, Mitchell Insurance Group
Why?
A newer, sturdier roof is less likely to result in weather-related claims—especially important in hail-prone Colorado.
Want more ways to save? Don’t miss 7 Ways Colorado Homeowners Can Save on Their Insurance Premiums
2. Leak Detection & Water Backup Systems
Flooded basements are one of the costliest claims for homeowners. Installing smart water sensors, sump pump backups, or shut-off systems can reduce your risk—and in some cases, qualify you for a discount.
These improvements are especially important if you have or plan to finish your basement.
3. Updated Plumbing, Electrical, or HVAC
Modernizing old systems doesn’t just make your home more efficient—it also reduces the chance of fire or water damage. Replacing outdated plumbing or knob-and-tube wiring can lower your risk profile in the eyes of insurers.
4. Alarm Systems and Security Upgrades
While the discount might be modest, upgrading your home’s security—especially with monitored systems—can result in a small savings. Smart doorbells, cameras, and central alarms also enhance your peace of mind.
Still wondering who can help you compare options?
Why Working with an Insurance Broker or Independent Agent is the Best Choice
Renovations That May Raise Your Premium
1. Finishing the Basement
Adding square footage, especially below ground, increases your home’s replacement cost. If you finish your basement but don’t update your insurance, you may be underinsured—and risk financial loss after a claim.
One homeowner, after finishing their basement, added water backup coverage and saw their premium increase—but it ensured full protection if something went wrong.
2. Major Additions or Mother-in-Law Suites
Planning to expand your home’s footprint? Whether it’s a sunroom, guest suite, or second floor, expect a higher insurance rate due to the increased cost to rebuild.
A good rule of thumb: More square footage = more coverage required.
3. Hot Tubs, Pools, and Large Decks
Outdoor living upgrades are great for relaxation—but they also increase liability. A hot tub or pool introduces risk, which insurers account for with higher premiums.
Want to find savings in other areas of your policy?
Why Bundling Insurance Saves You More in the Long Run
Why You Should Always Notify Your Insurance Agent Before Renovating
Many homeowners make updates without letting their insurance company know—and that’s a mistake.
In one example, a homeowner contacted their agent before starting a roof replacement, flooring install, and deck build. The agent helped them:
- Ask the right questions about materials
- Anticipate changes in premium
- Ensure proper coverage from day one
“You don’t want to wait until after the work is done to find out you’re not properly covered. We encourage our clients to reach out before breaking ground—even if they’re just considering options.”
— Chris Mitchell
What National Experts Say
A report by CBS News highlights how renovations that reduce claim risk—like water shut-off systems or roof upgrades—can bring significant savings on your premium. However, projects that add liability or value can just as easily increase it.
This matches what we see with Colorado homeowners: Some upgrades pay off, others require more coverage. Either way, awareness is key.
Learn More About Home Insurance in Colorado
Ready to review your coverage or learn how your renovation could affect your rate?
Explore our Home Insurance Services
Mitchell Insurance Group helps homeowners across Colorado stay protected, informed, and confident about their coverage.
Frequently Asked Questions
How much can I save with a new roof?
Savings vary by material and insurer, but we’ve seen up to 22% in premium reductions for new metal roofs.
What renovations increase premiums the most?
Finished basements, structural additions, and features like pools or hot tubs generally result in higher premiums.
What happens if I don’t report home improvements to my insurer?
You may be underinsured, and in some cases, denied coverage for a claim that exceeds your outdated policy.
Can I estimate changes to my premium before renovating?
Yes. Contact your agent in advance—they can help you understand potential costs before you make a decision.
Does life insurance connect to home upgrades?
Not directly—but if your assets grow, it’s a smart time to revisit your broader financial protection plan.
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