These 4 upgrades can lower the cost of your homeowners insurance

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Homeowners insurance costs an average of $1,083 annually across the US — but that number varies widely from state to state. For example, annual premiums in Florida average $2,055, while policyholders in Oregon pay just $574.

It’s difficult to nail down exact policy pricing because multiple factors go into your specific calculation, says Angela Orbann, vice president of personal insurance products at Travelers Insurance. Which state you live in is a big one — coastal homes come with different risks than those located in the Midwest, for example — but your insurer will also consider the size, age and characteristics of your house, prior losses and features that qualify you for discounts or credits.

Insurance companies offer policy discounts in the form of credits or reduced premiums for home upgrades that could minimize the need to file a claim as well as the dollar amount paid out for claims that do come through. Basically, it costs insurers less to reduce premium prices than it does to pay for damages and losses.

Some of these home improvement projects are expensive upfront, which means it could take years for insurance discounts to match what you spend on the upgrade. However, reducing the cost of your insurance is just one of the advantages of making the investment. A new roof or storm-resistant windows, for example, could save you thousands of dollars in damages in the event of a hurricane or hailstorm, while home security can stop a burglar in his tracks.

“These devices are protection that will save you from the pain of a loss, so they’re good preventative measures in addition to making sure you have sufficient insurance coverage,” says Jenny Naughton, executive vice president at Chubb Personal Risk Services.

Here are four upgrades to consider — and how they’ll pay off over time.

HOME SECURITY

A home security system is one of the simplest upgrades homeowners can make to reduce both policy costs and the risk of loss due to burglary, accidents and storms. Home security generally falls under insurance companies’ protective device discounts and may include everything from door sensors and smoke alarms to centrally monitored systems that automatically notify emergency personnel if a problem arises.

WATER SHUTOFF DEVICES

According to data from the Insurance Information Institute (III), water damage accounted for nearly 30% of losses in 2016, and the average loss between 2012 and 2016 totaled $9,633. Devices that cut off a home’s water supply when they detect damage to pipes, water lines and plumbing can prevent significant damage and save homeowners an average of 3% on their premiums, according to Trevor Chapman, a Farmers Insurance spokesman.

Water leak sensors are another category of protection. However, they merely detect moisture in places where it shouldn’t be, such as behind a washing machine or toilet, and don’t actively cut water flow. They’re useful but unlikely to qualify you for the same level of discount.

Water shutoff devices cost $174-$208, on average, to install. With an average annual discount of $32, it would take between 5.4 and 6.5 years to pay off and start saving you money.

STORM-SAFE WINDOWS

Wind and hail was the number one cause of loss in 2016, according to the III — about 1 in 40 homes has a claim in this category each year. One of the main upgrades to prevent wind damage, particularly in hurricane-prone areas, is storm-safe windows: impact-resistant glass and roll-down shutters, for example.

Those who live in wind-prone areas could see a 10-15% credit on their policy for wind protection upgrades.

Wind-related discounts and credits vary widely and may only be applicable if you live in a state with high wind risk or meet specific retrofit requirements. Naughton says that those who live in wind-prone areas could see a 10-15% credit on their policy for wind protection upgrades.

Storm windows cost an average of $4,656 to install. With an average annual discount of $108-$162, it would take awhile to recoup the cost from the upgrade alone (we’re talking between 28 and 43 years), but if you do live in an a high-risk area, it could save you thousands in repairs should a bad storm damage your home.

UPGRADED ROOFING

A new roof is a significant — and expensive — undertaking. However, a bad roof can cost you a lot. If your roof leaks, you’re likely to face rotting wood and interior water damage. If it’s weak, hail and high-impact storms can break through.

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