Insurance carriers of all kinds are in the business of calculating risks. As far as they’re concerned, the fewer they take on, the better. That’s why middle-age drivers who haven’t gotten any speeding tickets pay less for auto insurance than inexperienced, lead-footed teenagers who can’t seem to slow down. It’s also why people with swimming pools or trampolines pay more for their home insurance than homeowners who don’t have them. The chance of a costly accident is much greater when more risk factors are present.
Risk, or cutting your chances of it, is why your agent loves that you’re buying a security system. That’s because the system drastically reduces your chances of having a break-in or fire, both of which could prompt expensive claims on your home insurance policy.
How great are the chances of a break-in? Every 13 seconds, a home in the U.S. is burglarized, according to the FBI. Residential fires, 370,000 of them, caused $6.9 billion in damage in 2011, according to the National Fire Prevention Association.
By some accounts, homes with security systems are 300% less likely to be broken into than houses that don’t have them. And while there could still be fires, early warnings from smoke detectors give firefighters an earlier start on saving your stuff, meaning payouts for damage will be much less.
There’s something in the deal for you as well. You could receive a discount on your home insurance premiums of as much as 10%. Once your system is installed, you’ll need to present your carrier with a certificate showing that you have the system. Other discounts you could receive for lowering risk include installing deadbolt locks on entrances to your house, which could net you up to 5% off your premium, and having a nonsmoking household, which could result in a price break of up to 20%.
You can’t eliminate some risk factors, of course. Homes along the East Coast are going to be more vulnerable to hurricanes than homes in other parts of the country. Homes in parts of the Midwest will be more prone to tornadoes. You can’t really do much if there isn’t a fire hydrant or fire station nearby your home. But if you concentrate on the risks you can control, you could save money on your insurance.
About the Author: Carrie Van Brunt-Wiley is the Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.