More on Home Insurance
More on Home Insurance
Published April 28, 2020
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When determining your homeowners insurance rates, your insurer will consider multiple factors and characteristics related to the property, including how susceptible it is to break-ins and theft. Installing a security system is one way you can make your home safer while lowering your policy cost.
If your home has safety devices like deadbolts, smart locks, burglar alarms, or a fully monitored security system, you can typically save anywhere from 2–10% on premiums. Insurers may provide a larger discount if you have more than one type of protective device or if your security system includes certain features like 24/7 professional monitoring. If your home is insured for more than $1 million, certain carriers like Chubb, AIG, and Travelers may actually require you to install professionally-monitored security systems.
While a home security system is a great investment for protecting your home, it may not be the best option if your goal is getting cheaper homeowners insurance. The maximum policy credit for home security devices is typically 10%, which means if your premium is $1,500, you’re saving $150 annually, or about $13 a month. Professional monitoring alone can cost up to $50 a month which more than cancels out any policy discount. If you’re looking for a significant reduction to your rates, you may want to consider raising your deductible or re-shopping your homeowners insurance policy.
While discount types and amounts can vary from company to company, home security system discounts can typically take 2–10% off of your insurance premiums
Deadbolts, standalone burglar alarms, smart home devices, and fully monitored security systems can all lower your homeowners insurance rates
If you have a home security discount, it will be noted on your policy declarations page
Both the type and availability of certain discounts are going to vary from company to company. Some insurers offer separate policy credits for deadbolts, fire sprinklers, and security systems, while others may include multiple safety or surveillance features under one blanket policy credit.
Here are just a few home safety features that can impact your homeowners insurance rates:
One of the more affordable ways to get a discount on your premiums is to install deadbolts on your doors. In order to receive a policy credit, you’ll likely need to have deadbolts installed on all exterior doors. If you only have a deadbolt on your front door, that may not be enough to qualify for this discount. Insurers will likely include smart locks with keypads or facial recognition in this discount category as well.
You don’t need to have an intricate home security system with expensive installation and monthly monitoring fees to earn a discount on your insurance premiums. Many companies still make standard burglar alarms that are loud enough when sounded to be heard by neighbors, and many insurance companies will give you a slight discount for that extra bit of home security. Standalone burglar alarms can typically be installed by the homeowner and don’t require any extensive wiring or expertise.
If your home is in a gated community, it’s likely because you’re part of a homeowners association, or HOA. If that’s the case, you may get a discount for the added security of living in an HOA-maintained gated community. Many companies offer further discounts if your HOA has its own patrol service.
For that added level of security and a potentially larger discount on your insurance premiums, a monitored security alarm system is the way to go. Most systems sold by security companies are professionally installed and placed in specific areas of your home with the highest likelihood of forced entry. Many security alarm systems can function like standard burglar alarms — they make a loud sound or alert your smartphone via an app. But most security system companies will give you the option of 24/7/365 professional monitoring for an additional monthly fee. Some insurance companies that insure high-value properties may actually require homes to be fitted with a professionally monitored security system.
Several professional home security companies advertise that their product can trim up to 20% off of your insurance premiums. Based on our findings, the maximum you’ll likely save is no more than about 10%.
Every bit helps, and the discounts can really add up if you have multiple other policy credits or discounts. But you probably shouldn’t get a home security system if the end goal is to make your homeowners insurance cheaper, because it simply doesn’t have a very meaningful impact on your rates. However, you should get a home security system if your goal is to make your home a safer place and prevent future theft claims down the road.
Installing a monitored home security system or centralized fire alarm in your home is great for your peace of mind and can help lower your rates, but there are a number of more immediate ways you can save on insurance without having to invest in all of the fancy equipment.
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.
Pat has a B.A. in journalism from Michigan State University.
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