Home Insurers Are Demanding Policyholders Make Home Updates To Keep Coverage. Here’s Why They’re Cracking Down.

“Insurance carriers are, for the most part, for-profit companies,” I declare to my risk management and insurance students. “They are allowed to make a profit. Does this shock you?”

Most students are surprised — especially after seeing headlines about insurance companies earning billions while raising policyholders’ premiums to record highs. But there’s a fundamental misunderstanding about how insurance works. Carriers pay for covered, accidental losses — not expected or routine maintenance repairs. Homeowners insurance isn’t a warranty contract.

Yet, insurers are increasingly asking homeowners to make upgrades or repairs on their end as a condition to renew their policies. These requests are to help mitigate risk that could end up causing a future claim. Sometimes the request is minor, like trimming a tree to avoid future damage from a falling limb. Other times, the request can cost thousands of dollars, like replacing a roof to prevent it from eventually leaking during a storm.

If you’ve received a letter from your insurance company asking for updates, you’re not alone. Rising claims costs and growing catastrophe losses have prompted insurers to re-evaluate older homes, higher-risk properties and regions with frequent storm activity — the homes that have a higher chance of filing an insurance claim. In some cases, your policy may not be renewed unless the requested changes are made, or you may end up with an endorsement that restricts claims payment.

Can my insurer ask me to make home updates?

The short answer is “yes.”

Despite being in the risk management business, insurance companies are fundamentally risk-adverse. They don’t want to underwrite properties associated with moral hazards. That’s when a homeowner becomes more careless with their property because someone else, in this case the insurer, will bear the cost of a covered claim.

Insurers must walk a fine line: pricing premiums fairly across similar risks, collecting enough to cover losses and expenses, but not charging so much that the policy becomes unaffordable or uncompetitive. It’s a delicate balancing act — one that’s become harder in recent years.

Homeowners insurance is not guaranteed. Every company uses underwriting guidelines — internal rules that help determine which properties meet its risk standards. And those guidelines have tightened. In 2023, property insurers spent an average of $1.10 for every $1 they collected in premiums. That’s not sustainable. In fact, over the past 20 years, the property insurance industry has only turned a profit in eight of those years.

To get back to financial stability, many insurers are now requiring policyholders to play a more active role in risk management and loss control. That means making repairs or replacements to reduce the likelihood of a claim.

Often, this request comes shortly before the policy renews. You may not remember exactly what information you gave when applying for coverage, but the insurer used those details to determine your premium. Now, they’re using updated data — from inspections, public records or prior claims — to reassess the risk and possibly raise your rates or require action.

For example, if your water heater was installed 35 years ago, the chance of it failing and causing water damage is much higher than average. To keep coverage in place — and to prevent widespread rate increases across the customer base — the insurer might ask you to replace it.

You may receive a conditional renewal notice, meaning your policy will continue if the changes are made. Or you might get a nonrenewal notice stating your coverage will end at the conclusion of your current term if the issues aren’t addressed.

In most states, insurers must give advance notice — often 30 days or more — before a home insurance policy expires. If the insurer has a condition for continued coverage, the request should include the reason for the action and a list of items the company wants addressed.

What updates can my insurer ask me to make?

Update requests can range from cosmetic touch-ups to significant upgrades. Common examples include:

• Minor maintenance: Removing debris from the yard, fixing broken steps or railings and trimming overhanging trees.
• Exterior repairs: Repainting the home, replacing damaged siding or shingles and repairing wood rot, sagging porches or decks.
• System upgrades: Replacing outdated electrical systems, like aluminum wiring, and updating old plumbing or HVAC systems.
• Roof replacement: Especially common in coastal or catastrophe-prone areas. Some insurers have age limits for roofs, regardless of condition.

In some cases, the requested upgrade relates directly to the home’s insurability. For instance, polybutylene plumbing — used in millions of homes between the late 1970s and mid-1990s — is known to fail without warning. An insurer may require full pipe replacement before renewing coverage. In other situations, it’s about reducing the risk of damage or liability. Uneven walkways and cracked concrete can be trip hazards, prompting carriers to request repairs. Even backyard equipment can raise concerns: a trampoline without safety netting or anchoring may trigger a notice requiring added safety measures — or removal altogether — due to the risk of injury claims.

Shop vs. upgrade: What should I do?

If your insurer asks you to make updates to your home, you typically have two options: make the requested changes or look for coverage elsewhere. Each has trade-offs.

Let’s consider an example. Emily and Carlos own a Queen Anne home which featured knob-and-tube wiring. Their electrical had been updated in 1990, but they left the old wiring for historical purposes. Their insurer wanted the knob-and-tube wiring system completely removed even though it was not an active electrical system. Emily and Carlos refused. In response, the insurer added an endorsement to the policy excluding electrical fires as a covered cause of loss.

Emily and Carlos eventually had a fire loss caused by a short in their holiday lights. The fire destroyed a significant portion of their home. The adjuster saw the knob and tube wiring, and despite the fact that it was not the cause of the fire, the carrier denied the claim. Emily and Carlos were left to repair their structure in the amount of $250,000.

While they avoided the cost of removing the old wires for historical reasons, Emily and Carlos took on a significant financial risk.

On the other hand, let’s look at homeowner Jacob. He faced a less urgent repair request — roof replacement within the next six months. Jacob replaced his roof 10 years ago with 30-year shingles. He asked his agent to shop around, hoping to find a more lenient insurer with a better premium.

Jacob’s agent found other carriers willing to underwrite his home with the current roof — which still had a 20-year life expectancy — but Jacob faced some hard decisions. The agent explained that the new carriers’ premiums were higher than expected because Jacob no longer qualified for a customer loyalty discount or bundling incentives he had with his previous insurer. In this case, switching saved him the upfront cost of a roof replacement, but his overall insurance expenses still increased.

Bottom line

Keeping your home insurance policy in force may require more effort than it used to. Insurers are facing mounting losses and reevaluating how much risk they’re willing to take on. That means you, as the homeowner, may be asked to take a more active role in protecting your property.

Some changes may be quick fixes. Others could involve major expenses or difficult trade-offs. Either way, ignoring a request may lead to reduced coverage or a nonrenewal notice that limits your future options.

Before deciding whether to comply or switch insurers, weigh the long-term financial impact of both paths. Some insurers view a nonrenewal — even one related to property condition — as a red flag, especially if the reason suggests poor property maintenance, high risks or prior claims. This can limit your options, raise your premiums, or force you into surplus lines or state-backed plans.

A maintenance request from your insurer may be frustrating, but it’s a reminder that homeowners insurance isn’t a warranty — it’s a financial tool built on shared responsibility. Carriers are trying to stay solvent. You’re trying to stay insured. Both sides have skin in the game.