I am on the hunt for my first abode. Unfortunately, the housing market is not the easiest to break into these days. For me the choices seem to be a decent condo or a “charming house with potential.” This seems to be code for a “tiny fixer upper.” I have decided I’m ok with “charming” if it means my dog gets a yard and I can get my figurative foot-in-the-door of my own home. Besides, I watch the DIY network. I know what I want and am ready to roll up my sleeves to make this house my home. I will do what I can manage on my own and hire a general contractor for the rest. For those of you who feel me and would like to create a home on a modest budget, here’s a few areas where a little upfront splurge on premium product can save money on home renovation (not to mention reduce your environmental footprint).

Photo Credit: raumrot.com

Optimize New Electrical to Conserve and Save

If you are gutting your fixer upper, you’ll need to install new electrical to bring your old home up to new code. In doing so, this will qualify you for a home insurance discount. Fire is a leading cause of home insurance claims, and in older homes a fire can arise from something as simple as using lightbulbs with higher wattages then your fixtures were intended to support. Maximize the savings from your new electrical by installing dimmer switches and ENERGY STAR Certified Dimmable Light Bulbs, which can reduce your power consumption by 70-90% and extend the life of your bulbs to more than 20 years¹.

Photo Credit: Hans

Go for Net-Zero

If you’re as dedicated to saving the planet as you are to holding onto your paycheck and can build the upfront cost into your budget, consider taking advantage of home solar panels. Solar allows many homeowners across the country to eliminate their monthly energy bills by balancing their incoming renewable energy with their consumption. This is referred to as a net-zero home. In many cases homeowners are even reimbursed for energy surpluses. Systems that qualify for the Energy Star program can also earn you a tax credit.

Break Even Point: There is no set rule, but for example, the California Energy Commission and California Public Utilities Commission estimate that you can expect rates of return between 9% and 14% on your Photovoltaic (PV) installation. They offer the following scenario: A south-facing three-kilowatt system is installed at a 30-degree angle on a single-family home with a utility bill of $180 per month in San Francisco. The panels would cost a customer an estimated $19,282 with a payback period of 12 years².

Insurance Coverage: If your panels are installed on your roof they should be covered by your Homeowners insurance policy, but the way insurers factor your panels may vary. For example, some insurance companies offer a discount for making a responsible decision, while others look strictly at how this could impact a claim (and thus your premium). Consider contacting your insurance agency to determine your best option.

Photo Credit: JWahl

Retrofit your fixtures for water conservation

Installing new plumbing can protect you from the risk of indoor flooding from eroded, leaky, inadequate pipes, and is another way to please your insurance company. Updating your plumbing can also reduce your water usage, particularly if your home upgrades will include new faucets, toilets and showerhead fixtures that are approved through the Environmental Protection Agency’s Water Sense^® program. In fact, the EPA reports that the average household spends as much as $500 per year on its water and sewer bill but could save about $170 per year by retrofitting with water efficient fixtures and incorporating water-saving practices³.

Photo Credit: Jan Mallander

Toughen up your rooftop

Perhaps one of the least exciting updates that can be made to an old home is a new roof. This is also one of the most important factors effecting your home insurance rate. Roofs are a common and costly claim. Older roofs can be badly damaged from high winds, snow, hail, falling debris and trees, or any number of common occurrences depending on where you live. If re-roofing is a part of your renovation plan, consider using an impact-resistant roofing material such as a UL 2218 Class 4 rated material. This is as sturdy as they come and can protect your home for decades. Your new roof will most likely also decrease your home insurance premium.

Photo Credit: Olu Eletu

Make the smart home choice

Who says you can’t have all the bells and whistles on a budget? Measures to protect your home now extend beyond fire alarms and extinguishers, deadbolts and security alarms. These are all great and highly recommended. However, if you’re the techy type or would simply like to add a greater layer of security (cue insurance discounts), smart home technologies are now widely available, affordable, can be self-installed, and can be used to optimize your energy consumption. With smart home technology, you can:

• remotely monitor status and control your lights, locks, and thermostat from smartphones, tablets or desktop.
• install meters to detect and alert you of potential gas leaks and moisture in your home. Active water meters can even shut off your water supply temporarily to prevent damage.
• record real-time video directly to your security provider’s server if motion is detected when your home is armed, or simply check in on your home, pet and family while you’re away.

In addition to being pretty cool and convenient, many smart home devices are also tax deductible.

When your renovation’s done

Once you’re enjoying your modernized, efficient home, it’s a good idea to contact your insurance company to make sure the new replacement value of your property is reflected in your Homeowners Insurance policy. To see if you can save more on your plan, talk to a licensed Answer Financial agent at 1-855-750-6627 to compare insurers in your area and make sure you’re getting a good deal on your policy.

Citations
1) www.energystar.gov/ia/products/globalwarming/downloads/Guide_Dimmable_LED_Lighting.pdf
2) www.gosolarcalifornia.ca.gov/solar_basics/pricing_financing.php
3) www.epa.gov/watersense/pubs/simple_steps.html

Related Articles
How adding an addition to your house affects your home insurance
Most Expensive Home Insurance Claims [Infographic]