Can Renovations Reduce Insurance Costs? A Florida Homeowner's Strategy

[Troy Parker]

Hello BiggerPockets community,

As a first-time homeowner in Florida, I've encountered some unique challenges, including the need to pay for an insurance policy upfront for a year in escrow due to the home's initial condition. While this initial policy allowed me to secure conventional financing, I'm now in the process of planning and executing renovations to enhance the value and appeal of my home, with the goal of switching to a different insurance policy after completing the remodel and being refunded the unused portion of the escrow. I'm wondering: can renovations actually help reduce insurance costs?

Why Renovate?

I'm committed to making strategic renovations to improve the home's structural integrity, safety features, and overall condition. By investing in quality renovations, I hope to enhance the value and appeal of my home, as well as potentially lower my insurance costs.

Strategic Renovations to Consider

1. Addressing Four-Point Issues: I've addressed the issues that needed to be rectified before obtaining conventional financing. By improving the overall condition and safety of the home, I'm laying the groundwork for potential insurance savings.
2. Quality Renovations: I'm focusing on making renovations that will improve the home's structural integrity, safety features, and overall condition. I'm working with a reliable contractor and investing in quality materials for the master bathroom, kitchen, and guest bathroom renovations, which I hope will position the home for potential insurance discounts.

Benefits of Lower Insurance Costs

By strategically planning and executing renovations during the remodeling process, I'm hoping to lower my insurance costs and save money in the long run. After completing the remodel, I plan to switch to a different insurance policy and be refunded the unused portion of the escrow, making this approach a win-win for improving my home and saving money on insurance.

Additionally, by paying 5% down and planning to reach 22% equity in the property to eliminate PMI, I'm taking proactive steps to reduce my monthly expenses and make homeownership more affordable and sustainable in the long term.

Conclusion

I'm curious to hear from the BiggerPockets community: have you found that renovations can help reduce insurance costs? Are there specific renovations or improvements that have proven to be more effective in lowering insurance premiums? As I continue my renovation journey and explore ways to enhance my home's value and appeal while saving money on insurance costs, I would appreciate any insights, tips, or advice you have to share.

Thank you for joining me on this journey, and I look forward to hearing your thoughts and experiences as I continue to navigate the world of homeownership and real estate investing in Florida.