Home insurance providers have a vested interest in reducing claims, so they offer homeowners who install security systems a discount on their premium. Besides burglar alarms, many of these systems include smoke and fire detection that can alert the fire department in time to lessen damage.

Burglary and fire damage are the largest home insurance claims. Adding monitored safety and security devices can reduce your homeowner’s insurance up to 15%.

Homeowners Insurance

Homeowners insurance, or home insurance, is a type of property insurance that covers your home and possessions against damage or theft. It also provides liability coverage in case a member of your household is harmed while on the property or as a result of your negligence. Virtually all mortgage companies require homeowners insurance and most lending institutions won’t finance a real estate transaction without it.

Insurance rates vary, but most homeowners policies follow a standardized format that includes basic coverages for the structure of your house, personal belongings and property loss, and personal liability protection. You can lower your premium by installing a burglar alarm that’s monitored, and you may get additional savings for other safety devices like deadbolt locks or smoke detectors.

A burglary claim typically raises your home insurance rates by 20%, and insurance providers recognize that homes with security systems are less likely to be burglarized than those without them. The average savings for a professionally-monitored burglar alarm is around 5%, or about $59 a year on your home insurance.

Renters Insurance

The costs of home ownership are considerable. Frugal homeowners often look for ways to reduce their monthly or yearly costs wherever possible. That includes implementing security systems that can help reduce home insurance premiums.

If you’re renting, consider a renters insurance policy that covers your personal belongings against named “perils,” like theft, fire, certain types of water damage and more. Some policies also include liability coverage to help cover expenses if someone is hurt on your property.

A basic policy typically covers items you have in your residence, including furniture and electronics. You can usually add a special coverage limit for expensive jewelry, bikes and other valuables. Some providers even offer coverage for your military gear, and some have identity theft protection with credit monitoring and other services. Roommates may need to be listed on a policy and additional fees may apply for pets, but this depends on the provider. Some companies even offer a discount for having a security system installed.

Auto Insurance

Homeowners insurance providers know that homes with burglar alarms are less likely to file a theft claim than those without. On average, a theft claim can increase your homeowners insurance rates by 20%.

That’s why many home security systems offer a range of features that can protect your belongings from theft, including burglary deterrent sensors and 24/7 video monitoring. A smart security system can also help you keep track of your belongings and prevent damage by letting you lock your doors remotely or receive alerts if the garage door has been left open.

Some insurance companies may even require a security system for homes with a high value, depending on the crime rate of your area. This is because these homes can be more susceptible to break-ins than those in lower value neighbourhoods. They may also have more expensive items such as art, jewellery and state of the art entertainment systems that can be costly to replace.

Life Insurance

While homeowners insurance is a necessary expense, it can also be a significant cost that many frugal people want to find ways to reduce. By installing smart home security systems that can deter crime and alert you to environmental hazards, frugal homeowners may be able to save on their premiums.

Break-ins are one of the most common and expensive homeowner’s insurance claims, which is why many insurance providers offer discounts to homeowners who have a monitored security system in place. On average, homes without security systems are three times more likely to be burglarized than those that have a professionally monitored alarm system in place.

Even a basic system that includes an alarm and updated deadbolts could help you save on your homeowners insurance, but the savings will go up if you install a centrally-monitored system that offers 24/7 professional monitoring. Frugal homeowners who can add safety and security features that can save on their premiums will have an easier time keeping up with other variable costs associated with owning a home.