Which upgrades cut home insurance rates?

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Dear Insurance Adviser,
We are thinking of making some improvements to our house. What home renovations can reduce your home insurance rate?
— Lois

Dear Lois,
There are plenty of ways to give your home a makeover and knock down your insurance premium in the process.

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Many home insurance companies offer new-home discounts to older, renovated homes that have replacement wiring or plumbing, or a new roof or furnace. Typical savings for making all of these improvements amount to about 10 percent in the first year, with the size of the reduction gradually decreasing over about seven years.

Consider installing a central burglar and fire alarm, which will save you about 10 percent every year.

When using a contractor for home projects, be sure that you request proof of general liability insurance and workers’ compensation insurance. That way, if there is a construction-related injury, you’ll be a lot less likely to be brought into the lawsuit.

Contact your homeowners agent when you start construction and raise your structural coverage to the new replacement cost of your home, taking the value of the renovations into account. While you’re reviewing what it will cost to increase coverage, check out how much you might save by increasing your deductible between $500 and $1,000. You will probably save another 10 percent off your total bill.

Have fun!

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