Use your tax return for homeowners insurance savings

With tax season upon us again, millions of Americans are receiving their refunds as the April 15 deadline approaches. Once you've filed your tax return, the question remains what you plan to do with it. According to the IRS, the average tax return for 2014 is about $3,000, which is a good chunk of change for most homeowners. While many Americans may be tempted to use their tax return to splurge on a new gadget or spend lavishly on themselves, there are ways to utilize your return to save more throughout the year. To make the most of your tax return, you could put that money back into your house to earn some savings on your homeowners insurance policy. Here are some projects to consider to make your home safer, more efficient and less costly to insure:

Security system
Installing a security system in your home will make it safer all around. Not only will an alarm system alert police and security if there is an intruder in your home, but having a system will bring responders to your home sooner. A security system brand or sign outside your home may also act as a deterrent for thieves who may attempt to break into your house. Insurance companies recognize these benefits and will usually offer a significant discount for homeowners with alarms in place. According to Realtor.com, the savings can be as much as 15 percent off your premium.

New roof
After one of the toughest winters of the past few decades, there is likely to be some roof damage for millions of homeowners. When water freezes alongside the edge of your roof or in your gutters, there is a good chance an ice dam will form, which could create much larger and expensive problems later. An ice dam will generally occur at the edge of your roofline and could trap snow and water from draining off your roof. This buildup can get underneath the roof shingles and leak into your home, causing serious damage.

While ice dams can usually be prevented with a little maintenance to clear debris from gutters and remove snow from your roof, once the damage has occurred, you are likely in for expensive repairs. Filing a claim to repair your roof could send your homeowners insurance prices sky high. To avoid leakage and receive a discount on your premium, consider using your tax refund to update your roof and insure that your home is better protected and insulated.

Wiring
According to the U.S. Fire Administration, electric home fires account for more than $1 billion in property losses every year. Old wiring in a home increases the risk of an electrical fire and may result in higher homeowners insurance rates. To protect yourself and your home from these major losses, you need to have insurance. Fortunately, you can lower your premium and reduce the risk of having an electrical fire if you install new wiring throughout the home.

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