Many insurance brokers encourage their clients to purchase a security system to reduce their homeowner insurance premiums. However, many homeowners choose not to invest in a security system, because they aren’t sure if it will pay for itself over time. Surveys from the nation’s largest insurance companies have shown that the potential savings is very significant.
Security Systems Can Reduce Insurance Premiums by 20%
The Rutgers University School of Criminal Justice conducted a survey in 2011 to understand the impact that purchasing a home security system would have on homeowners insurance premiums. The researchers interviewed the nation’s 10 largest insurance companies and found that the average premium discount for purchasing a home security system is 20%.
Electronic Security Association (ESA) and other home security companies found the data to be very compelling. Dom D’Ascoli, the president of ESA, said that people could use these insurance discounts to pay for a large portion of the installation costs.
Why Insurance Companies Offer Discounts
Homeowner’s insurance companies want to minimize the number of claims. Insurance claims don’t only require them to pay money to their clients. They also have to spend a lot of time and money processing those claims. They would rather incentivize clients to take the steps needed to reduce the claims they need to file.
The biggest reason that insurance companies are likely to give such high discounts is that home security systems reduce the risk of being burglarized by 60%. Burglaries are one of the biggest costs that insurance companies have to deal with. An estimated 2 million burglaries are reported each year. The average burglary costs about $2,000. It stands to reason that insurance companies would give substantial discounts to homeowners that took the steps to reduce the risk.
Modern security systems can reduce the risks of other problems as well. Many home security systems such as those designed based in Lafayette and other communities can help prevent fires, carbon monoxide poisoning and water leaks. This has helped significantly reduce the cost to insurance providers, which has led them to give even more generous premium discounts in recent years.
Work With Your Insurance Company
Most insurers will offer a great discount if you buy a home security system. State Farm typically offers a 10% discount on its alarm system, plus assistance with installation costs. You may want to switch insurers if they don’t, because you may end up overpaying hundreds of dollars a year.
You will want to work closely with your insurance company to learn about the home security discounts that they provide. You will want to find out what the amount of the discount is. You will also want to find out what security systems are approved.
