Most homeowners realize they need to do standard maintenance repairs on their homes to keep things running smoothly. However, it’s also common for most homeowners to interpret home repair work as primarily maintenance in nature. What many people do not realize is that certain things should be replaced before they fail to prevent significant damage. While this may seem like a costly proposition, not doing so can result in a very expensive insurance claim. To help offset the expense of preventative replacement, you should be aware that your insurance premiums might be reduced. That should be a bit of added incentive.
An aging home with aging components is a significant source of claims for home insurance. Aging plumbing or electrical are more likely to fail and cause significant damage to the home. In addition, a repair would require upgrades to current code regulations that will even further increase the cost. As a result, you are likely paying a fairly high insurance premium on your aging home. Remember, your insurance premium is calculated on the expected replacement cost of your home. If the cost to replace your home is greatly increased because of aging components, you pay more in premiums.
A good idea before you start any repairs or renovations is to check with your insurance company about discounts. For example, if they offer incentives to homeowners who replace their roofs, that might be the first place you start. A new roof is costly, but it will have the benefit of protecting your house better than the old roof. Plumbing repairs should also be done before they actually are necessary. New washing machine hoses and angle stops under your sinks should be part of your regular maintenance routine. Even though they are not technically “maintenance,” they have a definite life expectancy and need to be replaced before a significant water leak occurs. Confer with your insurance company as they may provide you with an incentive to upgrade these items to the most current design.
If you complete a renovation of part of your home, those newly constructed portions can also lead to some insurance savings. While the replacement cost of your home may have increased because of the newer materials, the lower likelihood of damage or failure has an offsetting effect on insurance premiums. It’s very common for insurers to give discounts on home insurance for houses built within the last decade, so the same theory holds for homes that are recently renovated.
You should think about your home maintenance with a long-term perspective no matter where you live: Kentucky, Michigan, Minnesota, Mississippi, Missouri. Instead of approaching repairs as bandages to tide you over for another year, consider the big picture. When you offset the cost of ongoing repairs with a one-time replacement, it may make more fiscal sense. Along with that comes the lower likelihood of damage to your home and, as a result, lower insurance premiums. It may ultimately not be much more expensive.