Burglars are aware of something that home insurance companies already know:
A property without a home security system is three times more likely to be robbed.
In fact, 60% of convicted burglars claim to have avoided houses with a home security system.
Much like the discount that auto insurance companies give to consumers who have anti-theft devices in their cars, home insurance companies will offer discounts to customers who have a monitored home security system.
Do home security systems save you money on home insurance?
The discount incentivizes policyholders to take precautions to protect their property. The more a home is protected, the less likely it will be robbed. The less likely the home will be robbed, the fewer claims an insurance company will receive from their customers.
Insurance companies understand that installing and also prominently displaying a home security system is a significant deterrent to thieves. And burglars, in turn, know from experience that a protected home is too risky a target -- they are far more likely to move on to a more vulnerable property if they first encounter a home with a security system.
Motion-detector lights that alert the homeowner, exterior cameras that can capture a trespasser’s face, or even just prominently placed yard signs and window stickers, can all be effective deterrents to would-be thieves.
How much is the discount offered by insurance companies?
Which home security devices work and which ones are less effective? And is getting that discount worth the investment of installing and maintaining a home security system?
Home insurance companies may offer up to 20% off the premium when the homeowner employs the use of a home security system. It differs between insurers, but in order to receive a discount, the insurer may require that the alarm system be comprehensive, containing not only the security component, but smoke detectors, environmental sensors like flood detectors, and that the property’s entryways be fitted with deadbolts. In this age of affordable home security systems, it’s easier than ever for a homeowner to set up their own integrated and comprehensive security system.
Insurance companies need to be profitable, so they’re not likely to hand out discounts if the math doesn’t add up. That is, they offer the home security discount because statistics show that the more their customers install home security systems, the less theft claims their customers make.
The discount serves as a motive for consumers to invest in a security system so that, in turn, the insurance company receives fewer claims from burglarized customers.
Having a home security system protecting your property can play a role in the reduction of crime in your neighborhood. This decrease in crime can, in the long-term, also reduce overall home insurance rates.
Monitored Security Systems
To qualify for the discount, insurance companies may require that the home security system is monitored: monitored security systems alert a service provider who then contacts the appropriate emergency or law enforcement agencies to respond to the triggered alarm.
Unmonitored System
An unmonitored system only alerts the homeowner or sounds an alarm at the residence without contacting either a third-party or the authorities. If a home protected by an unmonitored system is broken into, the likelihood that personal property is stolen and that the perpetrators are not caught is greater.
For the homeowner, a system that immediately lets would-be intruders know that the property is protected is ideal. Exterior lights with motion-detection, exterior cameras, and lawn signs or window stickers all let the burglar know that they will not be able to trespass undetected.
Today’s video security cameras are affordable, easy-to-use, and can allow the user to monitor what’s going on in and outside of the home at any time.
How much you will save with a home security system discount on your insurance premiums will depend on how much you currently pay. And those costs are determined by where you live, the size of your home, the size of your deductible, and the amount of liability on your policy
The national average annual home insurance premium is around $1,200 per year, based on an average-sized home. With a 20% discount, that translates to $240 yearly savings.
If you live in a large home in one of the more expensive insurance states like Florida, your annual insurance premium may be around $4,000 per year; whereas your premium for a small home in a less expensive state may be closer to $600 per year.
Any discount is better than no discount, but in some areas of the country, it could save homeowners thousands of dollars in a matter of a few years.
For some homeowners, investing in a home security system is a no-brainer; if they live in a neighborhood that has a history of break-ins, an alarm system provides peace of mind and a deterrent to would-be thieves.
For others, even if there is no history of crime in the area, a security system gives them an eye on their property when they are away.
Home security systems on average have an upfront cost of around $300, while ongoing monitoring charges can range from$15 to $50 per month. In cases like these, the cost of maintaining the alarm system might be greater than the discount provided by the home insurance company.
Home security is based off your budget and individual needs
What is best for you is a combination of your budget and your individual home security needs.
Many factors go into considering whether a home security system is a worthwhile investment. Consider the general safety of your neighborhood: frequent break-ins in your vicinity only increase the chances that someone has been scouting your property as a possible target.
A security system in this scenario would be worthwhile, even without a discount. Homeowners and renters certainly have a good idea of what their possessions are worth. If you have valuable furniture, electronics, and collectibles, they might be included in your insurance policy. But what price does one put on their safety?
For those who live without the threat of a break-in to their homes, investing in a security system may not make sense.
The upfront hardware costs of a security system along with any monthly subscription to a monitoring service can be cost prohibitive for some. For those homeowners, the coverage on their fire or accidental damage policies takes precedence.
However, even in neighborhoods which don’t have a record of break-ins, safety and theft-deterrence should always be paramount; a discount shouldn’t be the only factor determining whether or not a security system is right for you.
With today’s technology, home security systems offer value beyond their original purpose. These systems can be used in conjunction with a mobile app to monitor video cameras to check on children or pets when the homeowner is away.
In addition to giving the homeowner control of the security system from anywhere in the world, today’s systems are a part of the “smart home” concept, where technology assists in automating routine tasks.
The smart home promises to become a more integral part of homeowners' lives every year.