Everyone likes to save money on home insurance, from first-time home insurance buyers to veterans. Luckily, there are many ways to do so, one of which we’re exploring today. Did you know that installing a home security system could make you eligible for a property insurance discount? Below, we dive into security system home insurance discounts to give you an idea of exactly how much money you could save on your home coverage.
The pros of home alarm systems
First, let’s delve into the benefits of home security systems in Canada. Whether you want to start protecting vacation rental property or are simply looking for ways to make your primary residence safer, a burglar alarm system can help. Monitored security systems may not only reduce your home insurance rates in Canada but they also serve to make your home safer and more secure. We offer a few reasons to invest in a home security system below:
Burglar alarm systems deter crime
First and foremost, home security systems are known to deter crime. In fact, studies show that homes with visible security cameras are broken into at lower rates than those without visible security systems. Therefore, if you want an effective method of scaring off potential burglars, a monitored alarm system is the way to go. On a larger scale, it may even make your neighbourhood a safer place to live.
Home alarm systems allow remote access to your home
A second benefit of home security systems is that they allow homeowners to remotely monitor their homes. Modern systems can be linked to the owner’s smartphone, allowing them to see video footage of their home at all times, whether they are home or not. These are known as “smart” home systems, and they can also be linked to the lighting, locks, and thermostat in your home. This level of convenience and added security would likely provide any homeowner with peace of mind but may be especially beneficial to anyone purchasing a vacant home insurance policy, since they may be away from their property for 30 days or more.
Monitored alarm systems can notify homeowners of fire or gas problems
Home security systems make your home safer in more ways than reducing crime. If you link your system to your smoke and carbon monoxide detectors, you can be notified of any gas or fire problems in your home. Even when you’re out of the house, you will receive a notification if a smoke or carbon monoxide detector goes off. Depending on how advanced your system is, you might even be able to program it to contact the police in cases of emergency.
Home security systems can lower your home insurance premiums
Next, home alarm systems can benefit homeowners by making them eligible for a home insurance discount. Many insurance providers offer discounts between 5% and 20% to policyholders whose homes are outfitted with a security system. The amount will depend on the insurance provider and the type of home security system installed on your property. Contact BrokerLink to learn more about home insurance premiums and deductibles today.
Home security systems provide evidence for insurance
One last insurance-related pro of home security systems is that they can provide evidence for an insurance claim. For example, if a fire breaks out in your home and you have security cameras on the property, chances are they will catch it on camera, which can help you prove how the fire started, giving you higher odds of your claim being approved and maybe even of getting a larger payout.
The cons of home alarm systems
Knowing both the advantages and disadvantages of alarm systems are important, which is why we will now list a few cons that may come with purchasing a monitored security system for your home:
The cost of the security system
If you want to install a security system in your home and enjoy the benefits listed above, it is going to cost you. Most home security systems are paid monthly. Costs vary significantly as they depend on several factors, including which plan you choose (many security companies offer an array of surveillance packages), whether you are monitoring the footage yourself or paying the security company to monitor it for you, and the extra surveillance equipment you purchase (e.g. sensors), if applicable. Please note that the monthly costs you are required to pay are in addition to the home security system installation fee, which is usually paid upfront.
The presence of security cameras can make family members or guests uncomfortable
One potential drawback of installing a security system on your property is that those who spend time in your home might feel uncomfortable with the presence of cameras. Real-time surveillance of your home could raise privacy concerns, so be sure to have an open discussion about the alarm system and how it will be used with all members of the household before installation.
Monitoring your home’s alarm system can be anxiety-inducing
A third con of home alarm systems is that if you choose to monitor the system yourself, doing so can result in anxiety. Given how important a job it is and how much you likely care about the safety of your home and family, many homeowners who monitor their alarm systems end up experiencing anxiety. If you are concerned about this, we recommend hiring a security company to monitor your system on your behalf. This way, you can still have peace of mind knowing that someone is monitoring your system without the stress and anxiety of having to do it yourself and feeling like you’re constantly on alert.
Home security systems can give you a false sense of security
Even the most comprehensive security systems are not a replacement for a homeowner continuing to monitor their home. You might think that all you have to do is install the system and everything will be good to go from then on, but this would be a mistake. Continue taking stock of your home’s security and make sure to keep up with proper maintenance. Just like how the HVAC or electrical system in your home requires maintenance, so too does your home security system.
Poorly installed burglar alarm systems can be hacked
Cyber attacks, hacks, and data breaches are all too common in the 21st century. Unfortunately, anytime you invite a new piece of technology into your home, you run the risk of it being hacked. While the latest burglar alarm systems are designed to offer protection against hackers and cyber criminals, there is no guarantee. To decrease your odds of being hacked, make sure to hire a professional to install your security camera for you. A poorly installed alarm system is going to be much easier to hack, which could make you vulnerable.
Security system discount on home insurance
Now that you know a little more about the pros and cons of home alarm systems, let’s get into the topic of security system discounts on home insurance. Since home security systems make your property a safer place to live by deterring crime, many home insurance providers offer discounts to policyholders whose homes have them. The discount you can expect ranges from 5% to 20%. This wide range is due to the fact that insurance companies use many factors to determine the discount you will be eligible for, including the type and model of the security system, the location of your home, and your current home insurance rates. Generally speaking, larger discounts are offered to homeowners with the most advanced, cutting-edge security systems. In addition, homeowners that have more than one type of safety device in place, such as a burglar alarm plus a deadbolt, smart lock, or monitored security system may also benefit from larger home insurance discounts. To give you an idea of how much you could save, take a look at the following example:
- Home insurance premium: $1,500 a year
- Security system home insurance discount: 10%
In this scenario, a 10% discount on a policy that costs $1,500 annually results in overall savings of $150. Broken down monthly, this can save you $12.50 per month on home insurance.
Further, it is worth noting that in addition to the home insurance discount you may qualify for by installing a security system in your home, you can also save money down the line since such a system can help prevent home insurance claims. With a burglar alarm system on your property, the odds of theft or a break-in are far less, which minimizes the likelihood that you will need to file a home insurance claim. Remember that the fewer claims you make, the better your rates will be. Conversely, filing an above-average number of property insurance claims can result in higher premiums.
Overall, since insurance providers have different ways of calculating security system home insurance discounts, we recommend contacting an insurance advisor at BrokerLink who can do some independent research and determine what discounts are typically offered by which providers. A broker can give you a better idea of how much you can expect to save according to the home security system currently in place at your home. They can also offer advice on ways to make your home safer or steps you can take to improve your home’s security and therefore qualify for a larger home insurance discount.
Why insurance providers offer discounts for burglar alarm systems
Break-ins resulting in property damage or theft are all too common in Canada. These types of incidents are generally covered by home insurance, and since most homeowners have home insurance, the frequency of these events directly correlates to a higher number of insurance claims. A greater number of insurance claims translate to more money that the insurance companies are responsible for paying. Therefore, when customers install security systems in their homes, thereby reducing the odds of a break-in, it’s a win-win. The policyholder benefits from a safer, more secure home while becoming less risky to insure and therefore qualifying for a cheaper home insurance rate. Meanwhile, the insurance company benefits from likely having to pay out less money in insurance claims since the home has become more secure and less vulnerable to risk. Ultimately, there are financial incentives for both policyholders and insurance companies relating to security systems, so it makes sense that insurers offer discounts for this.
What types of security systems can lower your property insurance premium?
Keep in mind that the type of security system installed on your property will have a direct impact on how much of a discount you qualify for, or whether you qualify for a discount at all. We break down a few of the most common types of security systems that can lower home insurance premiums. Remember that the more security measures you take, the better your discount and the cheaper your rates are likely to be:
Monitored security systems
A monitored home security system is one of the most popular types of safety measures that a homeowner can take. These types of systems, especially modern ones with security cameras that are monitored 24/7, often result in the best insurance discounts. These security systems allow you to see what’s going on in your home at all times, with some even notifying homeowners of potential fires, water leaks, and carbon monoxide levels.
Deadbolts and smart locks
Deadbolts are another type of security measure that might allow you to qualify for a home insurance discount. To qualify, your insurer will likely require you to install deadbolts on all exterior doors or entry points into your home. Smart locks that can be controlled remotely or those with keypads or facial recognition may also make you eligible for a home insurance discount.
Basic burglar alarms that emit loud noises when triggered (so loud that they can easily be heard by neighbourhood) can make you eligible for a discount on property insurance, albeit a small one.
Qualifying for an insurance discount when you install a home security system on your property
Purchasing a home security system doesn’t automatically mean you will qualify for a home insurance discount. It is important to be aware of the conditions that must be met in order to qualify for such a discount before going out and purchasing a brand-new system. Conditions vary between insurance companies. However, there are a few that are fairly universal.
First, for your security system to qualify for a discount, it must be operational. This means it might be installed and in working order. Your insurer may even require a certificate to confirm the system has been installed properly. Further, some insurance companies may only offer discounts to home security systems that are monitored by a third party, such as a security company. So if you were planning on installing, maintaining, and monitoring the security equipment yourself, you may want to double check that this is allowed with your insurance provider. Lastly, not all types of security systems result in discounts, or some may only result in marginal ones. Therefore, we recommend consulting with an insurance broker before buying a new system. You may need an insurance broker if you to understand which systems offer what discounts, especially if one of the main benefits you hope to derive from your new security system is an insurance discount.
Additional home security system features that can keep rates low
Many security companies offer several bundles or packages to customers that include a variety of security services. The more security services you add to your bundle, the more your home insurance discount is likely to be. Some of the most popular home security add-ons include:
Smoke and water detection
If you opt to install additional smoke alarms and a water leak detection device in your home, and you link these with your home security system, you can keep insurance costs low. Why? Now not only will the odds of a break-in or theft be lower but so too will the odds of a fire or flood.
Centrally monitored security (third party monitoring)
Centrally monitored security (CMS) is when a third party monitors your home security system 24 hours a day, 7 days a week, 265 days a year. With a CMS system, you will receive instant notifications if an alarm in your home goes off. In serious situations, when an alarm is triggered, the third party monitoring your system will immediately contact the police. Therefore, CMS systems offer around-the-clock security, which makes them extremely comprehensive.
Security cameras/video surveillance
A picture, or in this case, a video, is worth a thousand words. In the eyes of an insurance company, there is almost nothing as valuable as video footage when it comes to home security. If you install security cameras on your property or a system that features video surveillance, you not only make your home safer but you will have clear evidence of what happened if an incident occurred. This can be hugely helpful during the insurance claims process.
Tips for preventing crime and break-ins
Installing advanced security systems in your home that include video surveillance, smoke and water detection, deadbolts, smart locks, and more can all work wonders for preventing crime. However, there are a few other basic practices to adopt to keep your home as safe as possible. Even if the following won’t impact your home insurance rates, they are still important steps you should take as a homeowner:
- Install motion-sensor lights in dark exterior areas of your home, especially near dark entry points.
- Make sure all windows and doors are shut and locked overnight and when you leave the house, especially those on the main floor of your home.
- Program lights to turn on automatically with timers if you are not home.
- Have a neighbour park in your driveway while you are away on vacation.
- Ask a friend to shovel your driveway/walkway in the winter, mow your lawn in the summer, and pick up your mail if you are going away.
Get in touch with BrokerLink to learn more about home insurance discounts
There are all kinds of home insurance discounts available to Canadian customers, but knowing what they are is half the battle. That is why BrokerLink is here. We are home insurance experts and we can inform you of all the discounts you might be eligible for, including security system home insurance discounts. We can explain how this type of discount works, what you need to qualify for it, and how much money you can expect to save on your home insurance policy. Beyond informing you of the many property insurance discounts out there, a BrokerLink insurance advisor can also give you tips on preparing for an insurance quote, provide you with a free home insurance quote, and explain the difference between home insurance vs homeowners insurance. For more information on the property insurance services offered at BrokerLink, get in touch with us today. You can reach us online via our website, by phone, or in person at one of the 200+ BrokerLink locations across Canada. We look forward to hearing from you!
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