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The True Cost of Homeownership: What You Pay Beyond the Mortgage

When most homebuyers calculate whether they can afford a new home, they focus almost exclusively on one number: the monthly mortgage payment. It’s the figure lenders qualify them for, the number discussed during showings, and the benchmark used to determine budgets.

The average annual cost of owning and maintaining a single-family home in the U.S., excluding the mortgage itself, is estimated at around $21,400 in 2025—roughly $1,800 per month.¹ When you factor in these national average ownership expenses, a $2,500 monthly mortgage can grow to over $4,000 in total housing costs.

Qualifying for a mortgage answers one question: “Can a bank trust you with this loan?” It doesn’t answer the more important one: “Can you comfortably maintain this lifestyle?”

In today’s market, where nearly 45% of homeowners report post-purchase regrets (most commonly because maintenance and hidden costs were higher than expected), understanding the full financial picture before buying has never been more important.²

The Predictable Ongoing Costs

Property Taxes

Property tax bills have been rising sharply nationwide, with the average reaching $4,271 in 2024 and many homeowners seeing increases of 16% or more.³ Even where tax rates dip slightly, rising home values keep actual bills climbing—creating the irony that a home’s appreciation increases annual expenses.

Property taxes aren’t truly fixed. Reassessments happen regularly, and as neighborhood values rise, so do tax bills—even when rates stay the same.

Homeowners Insurance

As of December 2025, the average premium for a new policy rose 8.5% year-over-year.⁴ Climate disasters, higher rebuilding costs, and insurer risk recalibration continue driving these increases, and the trend shows no signs of reversing.

A homeowner could see their monthly payment jump $200-300 in a single year without taking any action themselves—simply because their mortgage servicer adjusted the escrow to cover higher insurance premiums.

HOA Dues

About 40% of homes for sale have HOA fees, with median costs around $125 per month, though single-family homes typically range from $200-$300 monthly.⁵ These fees rarely decrease and often include special assessments that can add thousands in unexpected annual costs.

Utilities

In 2024, energy and utility costs averaged $4,494 annually, with internet and cable adding another $1,515.¹ Buyers moving from apartments to single-family homes often see these costs double due to increased square footage, outdoor irrigation, and climate control demands.

Routine Maintenance

Beyond emergencies, homes require ongoing care: lawn service, gutter cleaning, pest control, HVAC servicing, and seasonal tasks. These aren’t luxuries for many households—they’re practical solutions to time constraints and property upkeep. Collectively, these services can add $200-400 monthly to ownership costs.

The Irregular—but Inevitable—Expenses

Major System Replacements

This is where many homeowners get caught off guard. Maintenance and repairs aren’t a matter of “if” but “when”—and recent years have made “when” far more expensive.

Home maintenance now averages around $8,800 annually, with first-year homeowners often facing even higher costs.^1,6 Major repairs aren’t cheap:

HVAC replacement: $5,000-$10,000
Roof replacement: $8,000-$15,000
Water heater: $1,200-$2,500
Major appliance replacement: $1,000-$5,000

These aren’t possibilities—they’re certainties with varying timelines.

Use the inspection as a planning tool. A 15-year-old water heater or aging roof signals $8,000-12,000 in likely expenses within the first few years. That’s not a deal-breaker—it’s a budget roadmap. Buyers who understand these timelines can plan strategically instead of scrambling when systems fail.

Newer isn’t maintenance-free. Newer builds offer a temporary reprieve, but systems still age, warranties expire, and eventually every home requires major capital improvements.

Emergency repairs happen at the worst times. An HVAC failure during a heat wave, a burst pipe in winter, or storm damage to the roof—these scenarios happen when it’s least convenient and most expensive. Without liquid reserves, a single emergency can derail finances entirely.

Ownership Costs That Creep Up Over Time

Here’s what surprises many first-time buyers: the so-called “fixed costs” of homeownership aren’t actually fixed.

While a locked-rate mortgage provides payment stability, the escrowed components—taxes and insurance—can climb significantly year over year due to inflation, climate risk, and local policy changes. A mortgage payment that felt comfortable at closing can feel tight three years later, even without lifestyle changes.

Picture this: a letter arrives saying the monthly payment is increasing $200 because insurance premiums rose and the property was reassessed at a higher value. No move, no refinance, no renovation—yet annual housing costs just jumped $2,400.

The same gradual creep affects utilities, maintenance services, and every other aspect of homeownership. Budgeting for homeownership means expecting these costs to rise 3-5% annually. True stability requires planning for volatility.

Planning Smarter: How Homeowners Can Stay Ahead

The encouraging news: buyer’s remorse is largely preventable. The issue isn’t buying the wrong house—it’s buying without adequate preparation.

Create a Dedicated House Repair Fund

Separate from emergency savings, this fund exists solely for home maintenance and repairs. Treat it like a non-negotiable monthly bill—set up automatic transfers so it happens without thinking about it.

The old rule of saving 1% of your home’s value annually? It’s outdated. Plan for more—closer to 2-3% of your home’s value annually, or whatever amount lets you sleep at night knowing the HVAC won’t derail your budget.

Don’t Drain Your Savings at Closing

Cash reserves protect against surprises and prevent forced debt when repairs arise. If possible, keep several thousand dollars liquid after closing rather than putting every available dollar into the down payment or upgrades. That breathing room matters more than most buyers realize.

Invest in Preventative Maintenance

Annual HVAC servicing, gutter cleaning, and seasonal inspections catch small problems before they become expensive emergencies. A modest service call that prevents a major system failure is always worthwhile.

Create a seasonal maintenance calendar: HVAC checkups in spring and fall, gutter cleaning before winter, roof inspections after major storms. Consistency prevents costly surprises.

Know Your Home’s Systems and Timelines

Understanding when major systems were last replaced helps predict future expenses. A 12-year-old water heater isn’t an emergency today, but it signals a likely expense within 2-3 years. Planning beats scrambling.

When Homeownership Still Make Sense

Despite the expenses, homeownership remains one of the most powerful wealth-building tools available to American families—when approached correctly!

Long-Term Equity Building

Mortgage payments build equity with every payment. Unlike rent, ownership creates a forced savings mechanism that compounds over decades. In most markets, homes appreciate over time, multiplying the wealth-building effect.

Stability and Control

Homeowners control their living environment. Want to renovate the kitchen, paint the walls, landscape the yard, or install solar panels? Ownership provides autonomy that renting never will. That control has both lifestyle and financial value.

Predictability vs. Rent Volatility

While ownership costs rise gradually over time, rent increases can be sudden and dramatic—with national rents climbing 31% over the past five year.⁷ A fixed-rate mortgage provides payment predictability that renting cannot match.

Yes, taxes and insurance increase, but the principal and interest portion—typically 60-70% of the total payment—remains locked. Renters face volatility on 100% of their housing costs.

Lifestyle Benefits

Beyond finances, homeownership offers intangible benefits: deeper community roots, stability for families, space for hobbies, and the pride of building something that’s truly yours. These benefits have real value, even if they don’t appear on a balance sheet.

The key is ensuring the financial foundation supports the lifestyle, not undermines it.

A Better Way to Think About Affordability

Ken and Libby Guthrie, Guthrie Group Homes, Knoxville TN Real Estate

The true measure of affordability isn’t what a lender will approve—it’s what allows sleeping well at night when the water heater fails or the insurance premium spikes.

The smartest buyers calculate affordability as “mortgage plus carrying costs” from the start, which might narrow the price range slightly but creates breathing room and peace of mind.

Homeownership remains one of the most powerful wealth-building tools available, but only when approached with financial realism rather than maximum leverage. Having an honest conversation about what affordability truly looks like isn’t about limiting dreams—it’s about making sure those dreams don’t become financial nightmares.

Sources:

Bankrate: https://www.bankrate.com/home-equity/hidden-costs-of-homeownership-study/
Bankrate: https://www.bankrate.com/f/102997/x/c84a6b9359/homeowner-regrets-survey-press-release.pdf
Matic: https://matic.com/blog/2026-home-insurance-predictions/
NAHB: https://www.nahb.org/blog/2025/12/property-taxes-2024-residential/
Realtor.com: https://www.realtor.com/research/homeowners-associations-2024/
Inman: https://www.inman.com/2026/01/12/as-home-maintenance-costs-rise-agents-turn-to-tools-that-reduce-buyer-risk/
Rentec Direct: https://www.rentecdirect.com/blog/new-data-shows-the-state-of-rent-in-2025-from-rentec-direct/

Homeowners

The Top Home-Related Tax Deductions Every Homeowner Should Know

Tax season. Just the words can send shivers down your spine. 🤢 But if you’re a homeowner, there’s a silver lining: potential savings!

You’ve probably heard that you can deduct the interest you pay on your mortgage — but did you know there are many other ways homeowners can reduce their tax burden?

Before you start your return, read this post for common home-related tax deductions, eligibility requirements, and tips on how to maximize your savings. If you use a tax preparer, share this article with them.

Table of Contents

Home-Related Tax Savings: The Basics

Before we get into the details, it’s important to define some important terms to set the stage.

Tax Deductions vs. Tax Credits

Most tax savings opportunities for homeowners come in the form of tax deductions. Deductions work by reducing your taxable income — essentially, the government allows you to subtract certain expenses from your total income before calculating how much you owe in taxes.

This means a lower taxable income and, ultimately, a lower tax bill. For example, if you earn $50,000 and claim tax deductions worth $5,000, you will only pay taxes on $45,000.

Tax credits, on the other hand, directly reduce your tax bill, rather than your taxable income. That means that if you owe $10,000 in taxes and claim a tax credit worth $2,000, your tax bill will be reduced to $8,000.

Pro Tip: Meticulous record-keeping is crucial. Keep detailed records of all potentially eligible expenses. This will make tax time much smoother and ensure you don’t miss out on any deductions.

Itemized Deductions vs. Standard Deduction

To understand what deductions apply to your situation, it’s important to know the difference between itemized deductions and the standard deduction. The standard deduction is a fixed dollar amount that you can subtract from your adjusted gross income (AGI) regardless of your actual expenses.

Itemized deductions, on the other hand, are specific expenses that you can deduct, such as mortgage interest, property taxes, and charitable contributions.

You’ll need to choose whether to itemize or take the standard deduction. Generally, you should itemize if your total itemized deductions exceed the standard deduction. Most home-related deductions are only applicable if you choose to itemize.

2025 Standard Deduction Amounts

Single and Married Filing Separately: $15,000
Head of Household: $22,500
Married Filing Jointly: $30,0001

Source: IRS

Key Home-Related Tax Deductions and Credits

If you do choose to itemize your taxes, common tax deductions and credits available to homeowners include:

Mortgage Interest Deduction

No one likes to pay mortgage interest, but the good news is that you can deduct interest used to buy or build your primary residence or a second home. However, there are certain limitations that you need to be aware of.²

Mortgage size: If you file your taxes single or married filing jointly, you can deduct interest paid on the first $750,000 of mortgage debt³ for your primary residence or second home. If you are married but choose to file separately, that limit drops to the first $375,000 (for each partner).

Requirements:

The mortgage interest deduction only applies if your home is collateral for the loan (which is standard).
To qualify as a primary home, your property must have sleeping, cooking, and toilet facilities.
If you are deducting mortgage interest on a second home, you don’t need to use the home during the year; however, if you rent it out, you must spend at least 14 days or more than 10% of the days you rented it out (whichever is longer).

So, how do you calculate how much mortgage interest you’ve paid?

The amount of interest you pay each year will vary, even if your interest rate is fixed — that’s because mortgage amortization³ means that you pay more interest earlier in the mortgage’s term, and more principal closer to the end.

Each year, your lender will send you (and the IRS) a copy of Form 1098, which shows how much you paid in interest.⁴

For example, let’s say you are a married homeowner filing jointly with a mortgage for $400,000. If your Form 1098 shows that you paid $25,000 in mortgage interest in 2025, you could deduct the full $25,000 from your 2025 household income.

Real Estate Taxes (Property Taxes)

You can deduct state and local real estate taxes (property taxes) you pay on your primary residence or second home. However, it’s crucial to understand what qualifies. Only property taxes imposed for “general public welfare” are deductible⁵—if your town imposes a special assessment for a project that directly improves your property value, like a sewer line, that is not deductible.

Furthermore, fees for local services, such as trash collection or sewer maintenance, are not deductible, even though your town may list them on the same bill as your property taxes.

There’s also a limit: the 2017 Tax Cuts and Jobs Act imposed a $10,000 cap on the total amount of state and local taxes (SALT)⁶ you can deduct. This includes state and local income tax (or sales tax) as well as property taxes.

Finally, be aware that the amount you deduct must match the amount actually paid to the tax authority.⁷ This might differ from what you put into escrow if you pay property taxes through your mortgage lender. Typically, the amount your lender paid to your tax authority is listed on Form 1098.

Home Equity Loan Interest

You can deduct the interest paid on home equity loans or home equity lines of credit, but with a significant caveat. Since 2017, that interest is only deductible if the loan proceeds are used to buy, build, or substantially improve³ your primary residence or second home, and the loan is secured by the home.

If you use the home equity loan for other purposes, such as a vacation, debt consolidation, or purchasing a car, the interest is generally not deductible. If you use part of the loan or line of credit for eligible purchases, and part for non-eligible purchases, only interest incurred on the portion used for eligible spending is deductible.

Loan interest is also not deductible if the funds are used for home improvement projects or repairs that do not “substantially improve” your home. Smaller projects, like repainting or new cabinets, likely do not qualify. However, projects like building an addition, a full kitchen remodel, or installing a new roof should qualify as substantial improvements.⁸

It’s also important to note that home equity loan and HELOC interest rate deductions are subject to the same upper limits³ as mortgages (and are added together with your mortgage for calculation purposes).

For example, if you have a $500,000 mortgage and a $300,000 home equity line of credit—which together exceed the $750,000 limit for a married couple—you would only be able to deduct interest paid on the first $750,000 of those combined loans.

Home Improvement Expenses

You can’t usually deduct home improvement expenses directly.⁹ However, the money you spend on capital improvements (improvements that increase your home’s value) can help reduce your tax bill later. These expenses are added to your home’s “cost basis,”¹⁰ which reduces your capital gains tax when you eventually sell the house.

Think of it this way: by keeping records of your home improvements, you’re essentially increasing the “price” you’re considered to have paid for your home, thus lowering your profit when you sell.

It’s important to note that not all projects qualify as capital improvement. Basic repairs and updates likely won’t qualify, while major additions and landscaping likely will (the considerations are the same as those used to determine whether home equity loan interest is deductible).

Beyond capital improvement, there are a few specific categories of home improvement that are deductible, including work on home offices (which is subject to specific limitations) and certain modifications for medical/accessibility reasons.¹¹

Home Improvement Expenses and Your Taxes

Energy-Efficient and Clean Energy Tax Credits

Certain energy-efficient home improvements can qualify you for valuable tax credits. Unlike deductions, which reduce your taxable income, tax credits directly reduce your tax bill, making them even more beneficial.

For qualifying energy efficiency expenses in the 2024 tax year¹², homeowners can claim up to 30% of qualified expenses on their federal tax return, with a maximum credit of $3,200.¹³ However, some qualifying expenses, like new exterior doors and windows, come with their own maximum credit limits, so it’s essential to check the specific rules.

Another option is the Residential Clean Energy Tax Credit, which offers a 30% credit for the cost of installing renewable energy systems, such as solar panels, on your primary residence or a second home that you use part-time and don’t rent out.¹³

Many states also offer their own tax deductions, rebates, or credits related to energy efficiency and clean energy, so be sure to investigate what’s available in your state.

Selling Your Home and Taxes

When you sell your home, the difference between the selling price and what you originally paid for it (plus any major improvements) is called your capital gain. Think of it as your profit from the sale. Let’s walk through a simple example:

Imagine you bought your home for $200,000. Over the years, you invested in some significant upgrades, like a kitchen remodel ($30,000), a new roof ($15,000), and landscaping ($5,000). These are called “capital improvements,” and they increase your home’s “cost basis”—essentially, what the IRS considers you to have invested in the property. In this case, your adjusted cost basis would be $250,000 ($200,000 original price + $50,000 improvements).

Now, let’s say you sell your home for $350,000. Your capital gain would be $100,000 ($350,000 selling price – $250,000 adjusted cost basis).

Capital Gains Exclusion

The good news is that the IRS allows you to exclude a significant portion of your capital gain from taxation!14 If you’re single, you can exclude up to $250,000, and if you’re married filing jointly, you can exclude up to $500,000.

To qualify for this exclusion, you need to have owned and used the home as your primary residence for at least two out of the five years before the sale. This is a key factor to consider when deciding how long you plan to live in a home.

Essentially, this exclusion means that, in many cases, homeowners won’t owe any capital gains tax when they sell their primary residence. It’s a valuable tax benefit that can significantly impact your finances.

Keep good records of your purchase price and any capital improvements you make to ensure you can accurately calculate your capital gain and take full advantage of the exclusion when you sell.

Record-Keeping Tips for Homeowners

Organized records are essential for taking advantage of tax deductions and credits. Keep all relevant documents, such as mortgage statements, property tax bills, and receipts for home improvements, readily accessible.¹⁵

It’s wise to keep both physical and digital copies (scan and save everything!). Store physical copies securely, perhaps in a safe deposit box. Keep all home-related records for as long as you own the home, plus at least three years after you file your tax returns for the year of the sale.

Homeowner's Tax Savings Checklist — Homeowner’s Tax Savings Checklist

Conclusion

Homeownership offers numerous opportunities to save on taxes. From mortgage interest and property taxes to energy-efficient upgrades and capital gains exclusions, understanding these deductions and credits can significantly reduce your tax burden.

Remember, this information is for general guidance only. Consulting with a qualified tax professional is invaluable for personalized advice.

Have questions about real estate or need a referral to a trusted tax advisor? Contact us today!

Note: This information is accurate as of February 2025 and is intended for general guidance only. Tax regulations are subject to change. Speak with your tax professional for more information.

Sources:
1. IRS – https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025
2. Nerdwallet – https://www.nerdwallet.com/article/taxes/mortgage-interest-rate-deduction
3. IRS – https://www.irs.gov/forms-pubs/about-publication-936
4. IRS – https://www.irs.gov/forms-pubs/about-form-1098
5. IRS – https://www.irs.gov/faqs/itemized-deductions-standard-deduction/real-estate-taxes-mortgage-interest-points-other-property-expenses/real-estate-taxes-mortgage-interest-points-other-property-expenses-5#:~:text=The%20total%20deduction%20allowed%20for,taxes%20or%20sales%20taxes)%20is
6. IRS – https://www.irs.gov/taxtopics/tc503#:~:text=Overall%20limit,your%20other%20itemized%20deductions%20also.
7. TurboTax – https://turbotax.intuit.com/tax-tips/home-ownership/claiming-property-taxes-on-your-tax-return/L6cSL1QoB
8. Bankrate – https://www.bankrate.com/home-equity/home-equity-loan-tax-changes/#how-to-claim
9. USNews – https://realestate.usnews.com/real-estate/articles/are-home-improvements-tax-deductible
10. IRS – https://www.irs.gov/publications/p523
11. NOLO – https://www.nolo.com/legal-encyclopedia/what-home-improvements-tax-deductible.html
12. USNews – https://money.usnews.com/money/personal-finance/articles/how-consumers-can-save-with-the-new-climate-tax-breaks
13. IRS – https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
14. Bankrate – https://www.bankrate.com/real-estate/capital-gains-tax-on-real-estate/#avoiding-during-home-sale
15. NOLO – https://www.nolo.com/legal-encyclopedia/tax-reasons-keep-good-records-home-improvements.html

Homeowners

6 Strategies to Save on Home Insurance Premiums

From wildfires to floods, the past few years have brought a historic number of devastating climate and weather events to the United States.

In 2023 alone, there were 28 individual weather-related disasters that caused at least $1 billion in damages each.¹

These events triggered a huge influx of home insurance claims, and analysts expect the increase in both catastrophes and claims to continue.

Adding to the problem, construction labor and supply costs have risen, making it more expensive to repair affected homes.

Consequently, home insurance rates have surged: In 2024, Bankrate reports, premiums are already up an average of 23%, following double-digit increases the previous year.^2,3

In disaster-prone regions, the situation is even more challenging.

Some insurers have pulled out of risky areas entirely, and many of those that still offer policies in high-risk areas have doubled or even tripled their premiums.⁴

For most homeowners, comprehensive home insurance coverage is crucial for financial security—but massive rate increases can turn a once-affordable home into a financial burden.

They can also pose a serious challenge for sellers.

A home insurance policy is typically required to get a mortgage, and, in some hard-hit regions, we’re seeing sales fall through or homes sit on the market because insurance policies are unattainable or too expensive.^5,6

But don’t panic! While these broader trends may be out of your control, there’s still plenty you can do to save.

Here are our top six strategies to slash insurance premiums while maintaining the protection you need.

1. Shop Around

Getting multiple quotes is a smart move for many major purchases, including home insurance.

We recommend reviewing at least three estimates before you commit to a policy.

You can get quotes either by reaching out to insurers directly or by working with an independent insurance broker.⁷

You’ll need to provide detailed information about the property you’re insuring and your claims history.

Make sure you read policies carefully before you choose.

Sometimes, a policy can look like a better deal at first glance but turn out to have important coverage gaps.

Be sure to consider how much the policy will pay out to repair or replace your home and review caps on personal possession and liability claims.

It’s also smart to read reviews from policyholders (Trustpilot is a good place to start) and ratings published by organizations like the Better Business Bureau and J.D. Power.

For help choosing the right policy, reach out to us for a list of trusted insurance professionals.

Review 3 Insurance Quotes Before Committing to a Policy

2. Increase Your Deductible

The size of your deductible—which is the amount you pay before your insurance coverage kicks in on a claim—is a major factor in your insurance cost.

A low deductible, such as $500, comes with higher premiums, while a higher deductible, like $2,500 or even $5,000, costs less on a monthly basis.

In some cases, you may be able to customize your coverage further by designating a different deductible for certain kinds of claims, such as those caused by named storms or natural disasters.

If you are confident that you have enough in savings to cover that initial outlay if needed, choosing a higher deductible can help you save significantly over the long term.

According to Nerdwallet, raising your deductible from $1,000 to $2,500, for example, could save you an average of 11% each year.⁸

3. Bundle Multiple Types of Insurance

Insurers want to get as much of your business as possible, so most offer significant discounts if you bundle your home and auto insurance, meaning that you package the two policies together.

With some insurers, you can get even higher savings by bundling more than home and auto—RV, boat, jewelry, and life insurance are potential options to consider.

According to US News and World Report, insurers typically offer customers who bundle home and auto insurance 10-25% savings on monthly premiums.

This approach also has other advantages: It cuts down on your paperwork, and in some cases—like if a storm damages both your home and car—you may be able to pay just one deductible instead of two when you file a claim.⁹

However, before you sign on the dotted line, remember strategy #1 and be sure to shop around. In some cases, bundling isn’t the cheaper option, and bundling deals vary between companies.

It’s also critical to carefully check that the bundled coverage offers everything you need.

4. Ask About Available Discounts

Did you know that being a nonsmoker might qualify you for a home insurance discount?⁸

Some insurers offer some surprising incentives for policyholders who pose a statistically lower risk of filing a claim. In the case of nonsmokers, that’s because of the decreased risk of a home fire.

Many carriers also offer discounts to military-affiliated families, homeowners in certain professions, such as teachers or engineers, or recent homebuyers.

Sometimes, you can also save by opting for paperless billing or paying your premiums for a full year upfront.¹⁰

Since available discounts vary significantly between insurers, the best strategy is to simply ask a representative for the full list of available discounts so you can see what cost savings might be available to you.

Avoid Making and Insurance Claim Unless Truly Nesessary

5. Avoid Making Small Claims

Worried that your premiums will rise significantly in the future?

Try to avoid making a claim unless truly necessary.

Many insurers offer discounted rates to policyholders who go a certain number of years without filing a claim, and filing multiple claims typically results in large increases.¹⁰

If you file too many, you may even risk nonrenewal of your policy.¹¹

Since the cost of even a small premium increase can add up significantly over time, if you have minor damage to your home—for example, if a few shingles blew off your roof in a windstorm—it may be a wiser long-term financial decision to pay out of pocket instead of filing a claim.

If the cost of the repair is less than your deductible, it never makes sense to file, and if it’s just slightly above your deductible, it’s also usually best to pay for the repairs yourself.

Additionally, always be sure to review your policy before you make a claim.

Even claims that are denied can count against you, so it’s not worth filing if the damage is clearly excluded from coverage.¹¹

If you find yourself in this situation, feel free to reach out for a list of reasonably-priced professionals who can help with home repairs.

6. Be Strategic About Home Improvements

Insurance premiums alone may not be the deciding factor for a home improvement project, but it’s important to know how renovations could impact your rates—for better or worse.

For example, some upgrades and repairs can reduce your premiums by making your home safer or less prone to certain types of damage. These include:¹²

● Upgrading your electrical system

● Updating your plumbing

● Installing a monitored security system

● Adding a fire sprinkler system

● Replacing the roof

On the other hand, some upgrades can raise premiums significantly, either because they increase the value of your home (and therefore the cost to replace it) or because they pose a hazard.

These include:¹²

● Installing a swimming pool or other water features

● Building an extension or expanding your living space

● Upgrading materials, like flooring or countertops

● Adding a fireplace or woodstove

Whether or not your planned renovations are on either of these lists, it’s wise to inform your insurer about changes you make to your home—otherwise, you may risk gaps in coverage.

And you’re always welcome to check with us before you begin any home improvement project to find out how it could impact the value and resale potential of your home.

The Bottomline

Guthrie Group Homes Knoxville TN Real Estate 2024

Protect Your Investment Without Sacrificing Enjoyment of Your Home

Getting the coverage you need for financial security without overpaying can be a tricky balance, especially in today’s environment.

But remember, while it’s important to find the best deal you can, home insurance isn’t an area to skimp on.

For advice on your specific risks and the type of coverage you need, we recommend consulting with a knowledgeable insurance professional.

We’re happy to connect you with a trusted adviser in our network.

And if you’re considering a home renovation, feel free to reach out for a free consultation on how it might affect your property value (and your premiums).

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, insurance, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

1. Climate.gov – https://www.climate.gov/news-features/blogs/beyond-data/2023-historic-year-us-billion-dollar-weather-and-climate-disasters

2. Bankrate – https://www.bankrate.com/insurance/homeowners-insurance/homeowners-insurance-cost/

3. Policygenius – https://www.policygenius.com/homeowners-insurance/home-insurance-pricing-report-2023/

4. CNN – https://www.cnn.com/2023/09/20/business/insurance-price-increase-risk-climate-first-street-dg/index.html

5. BBC – https://www.bbc.com/news/business-66367224

6. US News – https://realestate.usnews.com/real-estate/articles/how-climate-change-could-impact-your-home-value

7. Nerdwallet – https://www.nerdwallet.com/article/insurance/how-to-shop-for-homeowners-insurance

8. Nerdwallet – https://www.nerdwallet.com/article/insurance/save-on-homeowners-insurance

9. US News and World Report – https://www.usnews.com/insurance/homeowners-insurance/how-to-bundle-home-and-auto-insurance

10. Marketwatch – https://www.marketwatch.com/guides/insurance-services/how-to-save-on-homeowners-insurance/

11. Bankrate – https://www.bankrate.com/insurance/homeowners-insurance/when-to-file-a-home-insurance-claim/#when

12. Bankrate – https://www.bankrate.com/insurance/homeowners-insurance/home-insurance-and-renovations/

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