Home Security System Savings

February 15, 2011

Home Security System

Can a home security system help you save enough money on your home owner’s insurance to make it worth the expense?  The answer really depends on why you’re considering installing a security system.

One of the main benefits of having a security system is the sense of protection it can offer. You’re paying for the feeling that your home and your family have a lower risk of something bad happening – and a better chance of getting a break-in or house fire resolved more quickly. 

Of course it’s hard to put a price on your safety and peace of mind but there are some numbers you can think about when trying to decide whether a home security system is worth it.

Home Insurance Savings

When you’re looking at trying to save money on home insurance the best thing to do is call up your insurance company and ask them what security improvements could lower your premiums.  Adding prevention measures such as smoke detectors or a burglar alarm will each lower your rates individually.  Then if you combine them into one system and add in monitoring the insurance savings could around 15–20% off your current payment.

You can get your insurance agent on the phone and ask them about different scenarios to see how much each security enhancement could save you.  Ask them for recommendations about specific systems and security companies to see if some have a bigger impact on your rates.

The savings in your insurance premiums likely won’t be enough to pay for the cost of the security system but it can make a difference. For example, let’s say you sign up for security monitoring that costs $30 per month – $360 per year. If you pay $500 every 6 months for your homeowner’s insurance and installing the system cuts your premiums by 20%, then it effectively drops the costs to $260. It’s up to you to decide if you’re willing to pay that much annually for a security system.

Home Security System Savings

There are two main costs that go into getting a home security system: having the system installed and the monthly monitoring service. It’s possible to get discounts on both but you’ll have a harder time getting a deal on your monthly fee.

Home Security Discounts

You can have a lot of success in getting a free security system installed, or at least a significantly discounted home alarm system. The security companies use a model somewhat similar to what your cell phone provider uses. They’ll give the equipment away at a significantly discounted cost or free just to get you to sign the two or three year contract.

Most major companies will either offer you a free system up front or you can negotiate for it. They really want you to sign that long term contract because they know once you start using the service you aren’t likely to stop. You build the cost into your budget and forget about it.

Once the original contract term is up, unlike cell phones, there isn’t usually a need for you to get new equipment in your home. The equipment they installed three years ago is fine, and instead of having to fork out new equipment again they just keep you on your steady monthly contract.

Discounted Monitoring Service

This is where you’ll receive push back on discounts. Again, think of the cell phone provider model. The major carriers give away phones or sell them at significant discounts, but you hardly ever see discounted monthly plans. The monitoring service is where the security company recoups the cost of the installation and eventually makes the monitoring profitable for them.

Any reduction in the monthly income from your house is likely to be met with resistance. The best way to get a discount is to pick up the phone and call a salesperson at the company. Be sure to have your research in front of you in terms of what other firms are offering, and proceed with normal negotiation tactics from there.

Occasionally you can find online specials, such as the Monitronic deals page.  You might also be able to find discounts through your insurance company. For example USAA has an agreement with ADT that can help save members money on the service.

Do You Need a Major Security Company?

If you do decide to install a home alarm system and check out your local Yellow Pages for home security you’ll probably see a large number of companies offering their services. The important thing to note is in may cases the companies you find in the Yellow Pages are tied one way or another to the major brands like ADT, Brinks, GE, Protection One, and Monitronics.

From a technology and logistics perspective it doesn’t make sense for the small security company down the road from you to be an independent firm with their own monitoring center. Instead they are usually an authorized seller or dealer for one of the major security companies.  Just ask any company you’re working with who does the monitoring on your home to be sure it’s one of the proven major players.

Hopefully this home security systems review gave you some items to consider when you’re comparing security systems and deciding if the cost is worth it to you.


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Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, ING Direct, and many others.

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7 Responses to Home Security System Savings

  • Ryan

    It is important for homes to have security alarms. It will lessen the number of cases of robbery. It is not only for your home safety but for the people living in the house also.

  • Carl Hide

    If it’s for our own security, we should not hesitate to spend a little because it will be quite the investment. But like what Bonnie said there are a lot of helpful and inexpensive ways to solve our security problem.

  • Bonnie Cottone

    There are less expensive DIY home systems that can be monitored by the family instead of an outside monitoring company. You only need a land phone line. They are also good because you can take them with you if you move. For smaller abodes such as apartments and condos, there are individual alarms. All items are portable. One can start small with necessary door and window alarms then add motion detectors, etc. These alarms are also good for travelers to use in motel rooms or RVs.


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