How Much Does a Home Security System Save on Insurance?

Homeshiledexpert.com. When homeowners consider installing a security system, safety is generally the primary consideration. Protecting family, property, and valuables from theft or fire is certainly a major concern, especially for those of you who spend your days outside the home working full-time. However, did you know that there's another benefit that's often overlooked: "home insurance savings?"

Home security systems make insurance cheaper

This is because insurance companies typically offer discounts to homeowners who actively prevent risks or maintain self-monitoring of their homes. A monitored security system is one of the strongest signals that you're serious about protecting your home.

This article will discuss how much insurance savings you can achieve with a home security system, the factors that influence the discount amount, and whether this investment is worthwhile in the long run.

Why Do Insurance Companies Offer Discounts?

Generally, insurance companies primarily assess the level of risk when determining premiums. The greater the likelihood of a claim being filed due to theft, fire, or other damage, the higher the premium you will have to pay.

Based on the above premise, home security systems reduce this risk in several ways, including:

They prevent burglars from targeting your home less often due to the presence of cameras, alarms, and visible security signs. If burglars notice the security of a home like this, they will think twice before carrying out their attack.
If a break-in does occur, the alarm often allows the perpetrator to flee more quickly, significantly reducing the damage and losses suffered by the homeowner.
Many systems include smoke detectors, carbon monoxide alarms, or water leak sensors, which can prevent large claims. This, of course, can be very cumbersome for insurance companies. Therefore, with alarms and smoke detectors in your home, the possibility of greater losses due to fire can be minimized. This will also make your premiums much cheaper.
Because insurance companies pay less on claims, they pass some of that savings on to you.

Average Insurance Savings With a Home Security System

So, how much can you expect to save? On average, insurance companies offer 5% to 20% discounts for homes equipped with a monitored security system.

Basic systems (alarms and sensors only): 5–10% discount.
Monitored systems with police/fire dispatch: 10–15% discount.
Smart systems with fire, flood, and carbon monoxide monitoring: up to 20% discount.

For example:

If your annual home insurance premium is $1,500, a 10% discount equals $150 in yearly savings.
With a 20% discount, you could save $300 every year.

Over 10 years, those savings can add up to $1,500–$3,000, depending on the system and your insurer.

Several Factors Affecting Discount Size

Even if you install a good home security system, not all homeowners will receive the same discount. This is due to several factors, including:

1. Type of Security System

In the context of modern home security systems, DIY systems without monitoring typically don't receive significant discounts. This is because unmonitored security systems only provide alerts, not monitoring that can work optimally to minimize intrusions and threats.

This contrasts with systems with 24/7 professional monitoring. Systems with continuous, 24/7 monitoring offer the largest discounts on the premium you will have to pay later.

2. Additional Security Features

The more sophisticated the security system you install in your home, the lower your insurance premium will be. If the system includes smoke detectors, carbon monoxide alarms, or water leak sensors, the discount can be even higher.

3. Insurance Provider

Each company has its own rules. Some offer only a 5% discount, while others offer up to 20%. In this case, you can research and determine which offers are better.

4. Location and Risk Level

Homes in areas prone to theft or fire usually receive larger discounts. Why is this? This is because areas with high vulnerability levels, but with a security system in place, can demonstrate their ability to provide protection from the unexpected. In addition, competitors from insurance companies will also conduct price wars in order to attract the attention of residents in areas with high levels of vulnerability.

Do the Savings Outweigh the Cost?

One common question is whether the insurance savings offset the cost of the system itself. Here’s a breakdown:

Cost of a monitored security system: $20–$60 per month, plus equipment (around $200–$600 upfront).
Average insurance discount: $100–$300 per year.

In many cases, the insurance savings alone may not completely cover the cost of the system. However, the true value lies in the combination of:

Peace of mind knowing your family is safe.
Reduced risk of loss from burglary or fire.
Increased property value, since homes with security systems are attractive to buyers.
Potentially lower insurance premiums, which can add up over time.

So while you might not “profit” from installing a system, the savings significantly reduce the overall cost.

How to Maximize Insurance Discounts

To maximize your premium discounts, you can take the following steps:

Contact the Insurance Company First

Ask what types of systems qualify for discounts. The more information you receive about their products, the more informed you can be about which insurance product to choose.

Use Professional Monitoring

Cheap systems without monitoring often don't get the maximum discount. If possible, consider a professional 24/7 home monitoring system. Insurance companies will consider your home to be a low risk for premium claims.

Add Fire and Hazard Detection Features

In the event of an unexpected event like a fire, you can integrate other devices. Combining smoke alarms, carbon monoxide, and water sensors can increase the discount.

Provide Proof of Installation

Insurers usually require a certificate from the security system provider. Besides legality, this is usually considered support for professional monitoring, even if you don't subscribe. Proof of installation of a home security system will serve as concrete evidence of your seriousness in securing your insurance coverage.

Review Annually

If you upgrade your system or change insurance providers, you may receive a larger discount.

Real-Life Example of Insurance Savings

Let’s imagine two homeowners:

John (no security system): Pays $1,600 per year in home insurance.
Sarah (monitored security system with fire protection): Pays $1,280 after a 20% discount.

Sarah saves $320 per year, which equals $3,200 over a decade. That money alone can cover the cost of her home security equipment and several years of monitoring fees.

Besides insurance savings, a home security system can help your wallet in other ways:

Preventing theft and damage: Avoiding even one burglary (average loss of $2,800 in the U.S.) saves much more than the system costs.
Energy efficiency: Many smart systems integrate with thermostats and lighting, lowering utility bills.
Resale value: Buyers often view a home with a security system as more valuable, helping you sell faster or at a higher price.

Is a Security System Worth It for Insurance Savings Alone?

The honest answer: probably not. If your only goal is to save on insurance, the numbers may not fully justify the investment. But when combined with protection, convenience, and peace of mind, the insurance discount becomes a meaningful bonus.

Think of it this way: you’re paying for safety, and the insurer is helping to foot part of the bill.

The choice in yout hand!

So, how much does a home security system save on insurance? Most homeowners can expect 5% to 20% off their premiums, depending on the system, provider, and added features. While those savings alone may not pay for the system, they significantly reduce costs and add up over time.

If you’re considering a security system, check with your insurance company to see what qualifies. The right system not only keeps your family safe but also makes your home more affordable to protect.

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