Can Installing a Security System Save Money on Home Insurance?

Is it true that you can save on your homeowner's insurance rates if you install a security system in your home?

In many cases, yes, it can be possible to save money on your home insurance rates when you install a home security system. This is because homeowners insurance companies have an interest in protecting your home. Every time that a claim is filed including in the case of damage from breaking and entering, as well as replacement of stolen items, the insurance company takes a hit to their profits.

For this reason, homeowners insurance companies are interested in reducing the size and number of claims submitted by homeowners. This is so important to insurance companies that they are willing to offer discounts for homes with security systems that help reduce the likelihood of burglary claims.

A majority of homeowner insurance providers do offer discounts for homes with security systems.

The reason that you purchase homeowners insurance is not just because it is a good idea but because it is nice to think that there is a buffer of protection should anything happen to your home. And while it is nice to think of an insurance company as a blanket of protection, at the end of the day insurance companies are a business and their central purpose is to earn money.

How homeowners insurance works

Insurance companies sell policies to homeowners at an annual premium rate. In exchange for this payment, the insurance company contracts to reimburse homeowners for any damage caused by events covered within the contract of the insurance policy. Should one of these contracted events occur and cause damage to your home after paying the deductible the insurance company will then pay for the repair and replacement of items subject to the coverage contract. It is a smart safety net for homeowners to hold onto and many mortgage lenders require that homeowners carry this insurance for loan approval.

The biggest hope of every homeowner's insurance company is that customers will pay more in their insurance premium bills than they have to pay out in claims on the property. This is how they make money. So preventing as many claims as possible increases the profit that the company makes.

Why would a homeowners insurance company offer a discount for a home with a security system?

A security system is a big deterrent for burglars and thieves. The United States Department of Justice and the University of North Carolina surveyed a number of convicted burglars and their results showed that about 80% indicated they would avoid homes that appear to have a security system.

This is a very significant number in preventing burglaries from happening in the first place. And preventing burglaries prevents homeowners from having to make an insurance claim and ask for protection. In addition, some security systems have smart features that can also help monitor items like potential fire or flood dangers. These are also huge factors in filing insurance help claims. 

How much of a discount can you expect?

The amount that your Insurance company will offer to discount really depends upon the company and the type of security system installed. Most often an insurance company will offer up to 20% savings on a premium. It is well worth asking your insurance agent about any potential discounts you can benefit from on your policy as this money can add up with time.

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