Renovate or Relocate? 3 Questions To Help You Decide

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. 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. 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. BOTTOMLINE: 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/

When you've lived somewhere for many years, it can be tough to say goodbye. But if you (or a loved one) currently have a home that is bigger than necessary or is too high maintenance, it may be time to trade unused square footage for a smaller, more manageable space. Take it from the downsizers who’ve been there: Although living small might require some adjustments, it can also be liberating––especially if you're in a stage of life where past responsibilities have given way to new possibilities and adventures. In fact, many downsizers report feeling invigorated by the change, according to real estate journalist and author Sheri Koones. “It scares people to think of moving into a smaller space,” said Koones to the Associated Press. “But every single person I interviewed who has made the transition says they are so happy they did.”1 The key is to find somewhere you can live well and move around comfortably, without feeling overly restricted. If you like the idea of aging in place or are already in your golden years, you may also want to look for signs that a new home can conveniently age with you. With that in mind, we recommend focusing your search around three key factors: desired lifestyle, optimal design, and long-term accessibility. Read on for specific tips, then call us for a free consultation. We can help you identify the types of homes that are best suited to living large with less. Do you have a loved one whose housing needs have changed? Share this information to help start a conversation about the benefits of downsizing. DESIRED LIFESTYLE The best part of downsizing is the lifestyle you unlock when you trade square footage for convenience. With fewer chores and home maintenance tasks to worry about, you can instead channel your energy into other pursuits. For example, instead of spending your afternoons working in the yard or cleaning, you can catch up on the news, read a bestseller, start a new craft project, or pursue other hobbies. You may even be able to travel or spend more time with friends and family. Research shows that individuals over the age of 65 report more life satisfaction when they have the opportunity to spend time around children, talk with friends, socialize in community centers, volunteer, or engage in hobbies. But that can be hard to do regularly when you've got a home that needs constant attention or you live far from your community.2 As you compare potential homes, keep in mind the type of lifestyle you envision. Do you plan to travel? If so, a home with extra security, such as a condominium or gated community, may give you some welcome peace of mind. Or do you plan to have friends and family stay overnight? In that case, you may want to look for a floor plan with flex space or a property that has access to separate guest suites. Alternatively, a senior community that offers catered meals and housekeeping may be a better choice if you or a spouse need extra support. Action item: Grab a pen and take some time to envision what your ideal future might look like. Write down the activities and hobbies you hope to add to your life or continue with going forward, as well as the chores and responsibilities you'd love to drop. We can use those answers to help shape your house hunt. OPTIMAL DESIGN Even though your new home will be smaller, that doesn't mean it has to feel cramped. As Koones explains, “The key is to have a home that is efficiently designed, both in terms of energy use and in terms of space.”1 Look for features that can help make a space feel bigger, like high ceilings, large windows, and an open layout. Built-in shelving that extends all the way to the ceiling can also make a small room feel more expansive by helping to draw the eye upward. The same goes for highly placed window treatments and striped or mural-style wallpaper, says interior designer, Kati Greene Curtis. “You’ll feel like you’re walking into the scene,” said Curtis to the Washington Post.3 Efficient layouts with flexible, multi-purpose rooms and few, if any, hallways work especially well for small-scale living. You can also limit dead space in a home by steering clear of layouts with awkward corners, unusable nooks, and other space-eating design elements. In addition, look for features that support a simpler, lower-maintenance lifestyle, such as easy-care floors, durable countertops, and bare walls with little, if any, crown molding. Don’t write off a home too soon, though, if it feels narrow or congested because of outdated design or poor staging. Cosmetic issues that visually shrink a space are often easy to fix. For example, you can instantly make a room feel bigger just by painting it a lighter shade. Adding mirrors and swapping out heavy curtains for sheer ones can also be effective. Plus, utilizing multipurpose furniture with hidden storage is a great way to maximize space. Action item: Make a note of your must-keep furniture and other items. Then pull out a measuring tape and write down the dimensions. Once it's time to visit homes, we'll have a more accurate sense of what will fit and how much space you’ll need. To get your creative juices flowing, you may also want to flip through some design magazines that specialize in compact living or catalogs that feature space-saving furniture and accessories. If you give us a list of your favorite features, we can use it to pinpoint homes that are a good match. LONG-TERM ACCESSIBILITY Buying a home that you can age well in can be a great way to boost your health prospects and happiness. According to the U.S. Department of Housing and Urban Development (HUD), homeowners who age in place instead of in an institutional environment not only save money over time, they also enjoy greater health and emotional benefits.4 Aging in place is also popular. According to survey findings from the National Poll on Healthy Aging, the vast majority of adults between the ages of 50 and 80 would prefer to age in their own homes.5 But even though many adults want to age in place, only 34% of surveyed adults currently live in a home with the features to make it possible.5 If you're already in the second half of your life, then it's smart to prioritize accessibility now, even if you're highly mobile. Choosing an accessible home will improve your odds of staying put for longer. Plus, you never know when you might need an accessible light switch, handrails in the bathroom, or a seat in the shower, says Sheri Koones. “Yes, older people with disabilities need them, but even younger people break a leg skiing, or have situations where they want a barrier-free shower.”1 As you consider your options, try to imagine what your needs might be as you get older and be proactive in identifying potential obstacles, recommends the National Council on Aging (NCOA).6 For example, a single-level home or one with wide enough stairs for a stair lift or access to an elevator may be a more practical choice than a home with lots of narrow stairs. Alternatively, a home with at least one ground-level bedroom and bathroom may also work well for you. Consider your needs outside the home, as well: If you frequently visit the doctor, grocery store, or community center, for example, then you may benefit from choosing a property nearby. Action item: Review the checklist below, adapted from the National Institute on Aging’s home safety worksheet, or download the full version from the agency’s website.7 Highlight the items that are most important to you. We can reference these guidelines as we consider potential homes and suggest ways to adapt a property to meet your current or future requirements. HOME SAFETY CHECKLIST 7 If a walker or wheelchair is needed, can the entrances to the house be modified — perhaps by putting in a ramp to the front door? Are there any tripping hazards at exterior entrances or inside the house? Are the hallways and doorways wide enough to accommodate a wheelchair if needed? Does the home have at least one ground-floor bedroom and bathroom? Are there any staircases, and if so, could they accommodate a stair lift? Is the house well-lit, inside and out, particularly at the top and bottom of stairs? Could handrails be installed on both sides of the staircase? Is there at least one stairway handrail that extends beyond the first and last steps on each flight of stairs? Are outdoor steps sturdy and textured to prevent falls in wet or icy weather? Are there grab bars near toilets and in the tub or shower? Have a shower stool and hand-held shower head been installed to make bathing easier? Is the water heater set at 120° F to avoid scalding tap water? Are there safety knobs and an automatic shut-off switch on the stove? Have smoke and carbon monoxide alarms been installed near the kitchen and in all bedrooms? Are there secure locks on all outside doors and windows? BOTTOMLINE You don't have to compromise on comfort to downsize successfully. We can help you strategize your next move and identify the best new home for you—whether that's a smaller home for rent or another one to call your own. We take pride in offering a full-service real estate experience and assisting our clients through all stages of the real estate journey. And we’ll go the extra mile to maximize your current home's sales price so that you’re set up for financial security. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: Associated Press (AP) - https://apnews.com/article/lifestyle-f094372b46bae82020c174907eb953c0 Healthcare (Basel) - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10671417/ Washington Post - https://www.washingtonpost.com/home/2023/02/07/make-small-room-appear-larger/ HUD User - https://www.huduser.gov/portal/periodicals/em/fall13/highlight2.html National Poll on Healthy Aging - https://www.healthyagingpoll.org/reports-more/report/older-adults-preparedness-age-place National Council on Aging (NCOA) - https://www.ncoa.org/adviser/medical-alert-systems/downsizing-for-aging-in-place/ National Institute of Health (NIH) - https://www.nia.nih.gov/sites/default/files/2023-04/worksheet-home-safety-checklist_1.pdf