The average homeowner pays just over $1,000 per year to protect their property from the unpredictable, according to the Insurance Information Institute.
Be it fire or hail, lightning or falling trees, home insurance enables you to repair damage caused by covered perils without voiding your savings account. Homeowners insurance also protects you against perils of the human variety — i.e. property crime.
Unlike electric bolts from the sky, property crime is a threat you are able to mitigate. Do your part to make your home less vulnerable to property crime by installing a security system, and most home insurance providers will cut you a deal — potentially 20-25% off.
Discounts depend on your security system and your insurance
Insurance discounts for home safety and automation has become an industry standard, but the nature of the discount varies widely between providers. Typically, professionally monitored home security systems will fetch the best deal. They also may be the only kind of security your insurance provider recognizes. Traditional security companies like ADT will issue an “alarm certificate” that you can present to your provider as evidence of your home’s protected status.
Discount will likely only be substantial if you have a full, monitored system like one from ADT. Still, your provider may offer discounts for self-monitored systems or for single devices, like an alarm or camera. Even small upgrades to your home’s safety can sliver off a few percentage points — think: gas, or water leak, or smoke detectors.
Don’t leave any discount on the table — communicate to your insurance agent all of your home’s safety features and don’t forget to update your policy if you add further points of protection.
Home security could pay for itself in the long run
The amount you save on your homeowners insurance by having a home security system won’t displace the cost of the system — not by a long shot. But having a security system could save you from a break-in, which would also save you from making an insurance claim.
In the event of a claim, you are first on the hook for your deductible, then for a potential increase in your premium. Why the increase? Because you look riskier to insure.
You always want to think twice before making a claim. The cost to repair damages and replace what’s been lost should clearly eclipse your deductible, or you shouldn’t even start the claims process. A filed claim that is eventually abandoned still shows up on your claims history, visible to every provider you work with from here on out, potentially raising rates or – if you’ve racked up a number of claims – making you uninsurable.
The Bottom Line
An insurance discount won’t make a security system pay for itself. But, by deterring property crime, a security system could help you to not use your insurance. That’s actually what both security systems and insurance policies have in common — you don’t want to have to use either, but you’ll be glad to have them if and when you do.
The future of insurtech — technological innovations that allow providers to better tailor coverage, assess risk, and process claims — will surely open up new potential for the overlapping goals of home security and home insurance. Discounts are just the first sign of that burgeoning relationship.