Homeowners insurance

If you're a homeowner with an insurance plan to protect your finances and home from weather damage, theft and fire, you probably want to save all you can on your rate. While you can save money by bundling your homeowners and auto insurance with one provider, you might not know how to reduce this rate even more.

Rates through the roof
Minor home improvements like new smoke detectors or an alarm system can knock off a small amount on your monthly insurance payments as well, but the big savings come in the form of major updates. To insurance companies, your home's roof can pose one of the biggest financial threats.

Between debris from major storms, including wind, rain, hail, snow and hurricanes, your roof can withstand a lot. However, older roofs that haven't been updated with newer, stronger materials are more likely to be blown off or damaged in a storm. When this happens, your home is more susceptible to other areas of damage and you are more likely to file a larger claim. As a result, your homeowners insurance could be significantly higher because of your home's roof materials.

Insurance companies rate roof materials by Class, ranking them on a scale of one through four, with Class 4 considered to be the sturdiest. When you upgrade to sturdier materials for a tougher roof, your insurance provider may require a test to prove it. In addition to saving money on your insurance premium, you could also be eligible for a tax deduction by doing this upgrade.

"Insurers definitely are giving discounts for Class 4 because, if your roof blows off in a rainstorm or nor'easter, the water damage is going to be substantial, resulting in a much larger claim," Madelyn Flannagan, vice president of agent development, education and research for the Independent Insurance Agents & Brokers of America, told Bankrate. "They definitely want you to protect yourself against that."

What you can save
Insurance savings will vary depending on the provider, but you can generally expect to save between 5 percent and 10 percent on your premium - though some providers may go up to 20 percent. That's because you are significantly lowering your claims risk by bulking up your roof to withstand the elements.

"Roofs are huge right now in the insurance industry," Teresa Taylor, personal lines sales and service of Peabody Insurance in Holly, Michigan, told the Tri-County Times, a Michigan newspaper. "With all the storms and damaging weather, some policies will give credits for new roofs, for up to five or 10 years. If you have a new roof, you should certainly let your agent know."

When you make any changes to your home that make it more secure or resilient to exterior forces, you should inform your insurance agent right away to get your homeowners rate adjusted. It can also be a good idea to check with your insurance provider before you commit to any renovations or upgrades to ensure you will be able to save money.

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