Home security sales and marketing teams are no different than their peers in other industries. They want you to buy security systems. So what do they do? They give you as many reasons as possible to make that purchase. One potential reason is to get a discount on your home insurance rates. But are suggestions of reduced rates legit?
As a general rule, some insurance companies will offer discounted rates on homes with installed security systems. How deep the discounts go is a matter of debate. I have seen estimates of 10%, 15%, and even 20%. There is no hard and fast number I could offer as a guarantee.
It is also important to note that ‘some’ does not equal ‘all’. For every insurance carrier offering discounted rates for home security there is another that doesn’t. But let us suppose your carrier does. Would a discount justify the cost of installing a security system?
Consider What You Pay Monthly
The starting place for answering the question is to consider what you pay for a homeowner’s insurance on a monthly basis. An annual policy costing $2,400 breaks down to monthly payments of $200. How much would you pay for a monthly home security monitoring package?
Based solely on monitoring costs, paying less for monitoring than you gain in insurance discounts makes investing in a home security system worthwhile. Unfortunately, monitoring isn’t the only cost. You also need to pay for the equipment. Equally unfortunate is the fact that it’s impossible to quantify its real value as determined by its ability to prevent property crimes. Some simple math will illustrate the challenge:
Imagine paying $1,500 for a new security system along with a monthly monitoring fee of $30. You save $40 per month (a 20% discount) on your insurance. Subtracting the amount of the monitoring fee leaves $10 per month toward the cost of the equipment. It would take more than 10 years to break even. But since you cannot measure the value of preventing a crime that never happens, you really cannot determine if home security is worthwhile based exclusively on dollars and cents.
Look at What Else It Offers
Maybe the possibility of an insurance discount is enough to get you thinking about home security. That’s great. Think about what else a security system offers. Perhaps it offers peace of mind. You sleep better at night knowing you are protected by a security system and a remote monitoring center keeping an eye on things.
You can also consider the possibility of combining home security with smart home automation. Vivint is one of the nation’s leaders in fully integrated systems. With a Vivint package, you go beyond security capabilities to include energy savings, convenience, and comfort.
It is hard to put a price tag on convenience and comfort. You can certainly quantify the energy savings you would enjoy by installing a smart thermostat that can learn your routine and adjust on the fly. But your convenience and comfort do not have a dollar value attached to them.
A Good Reason to Think About It
Doing the math doesn’t justify investing in a home security system solely for the purpose of getting a discount on homeowner’s insurance. A discount simply doesn’t offer a large enough financial return. Still, a potential discount offers enough reason to at least think about home security.
Saving a little on your homeowner’s insurance reveals something important: insurance carriers offering discounts consider homes armed with security systems less of a risk. And that, my friend, is the real value of home security. It’s all about reducing your risks.