The US has the strongest economy, it boasts an average life expectancy of more than 79 years, and it’s one of the leading countries in the field of technology. But that doesn’t make it a crime-free utopia.
Security is still a big priority. Both businesses and homeowners allocate portions of their budgets toward protecting their properties. And that’s why home insurance is such a large market in the US.
Smart security may just be the answer millions of people are looking for. Plus, securing your property with recognized security measures should help you find some useful home insurance discounts. Let’s see how this works.
What Is Smart Security?
Almost any digital device can connect to the internet nowadays. And when your security products can connect to the internet it’s referred to as “smart” security.
Thanks to the internet of things (IoT), smart home products of all sorts and kinds can connect to the internet. You’re now able to control these smart products from anywhere in the world as long as you have an internet connection. 76% of smart home products in the US are currently controlled by smartphones. This remote control ability helps give smart security its effectivity and versatility. And these unique attributes are what lead to homeowners insurance discounts.
What Is the Internet of Things?
People aren’t the only ones on the internet any more thanks to the internet of things (IoT). “Things” like computers, smart home products, and robots also use the internet. Hence the name. The IoT is like a vast network that stretches across the planet. Internet connectivity enables an IoT-ready product to work its magic.
The internet of things has made it possible for all kinds of devices to interact on a global scale. You can access your smart CCTV camera at home as long as you have a smart device in your hand and a stable internet connection. The IoT has created a new kind of market, and it’s changing every industry in the world—even the insurance market. Shopping for home insurance will never be the same again.
Some Home Security Statistics
Let’s have a look at the prevailing home security statistics in the US before we go any deeper into the world of home insurance. These numbers will help you understand how and why insurance companies make their decisions and determine prices.
1.4 Million Home Burglaries Occur per Year
You might be shielded from it. Your own neighborhood could have a relatively low crime rate. But the numbers don’t lie. Insurance companies are exposed to 1.4 million break-ins per year. That’s a burglary every 13 seconds. Keep this in mind next time you discuss prices on home insurance quotes.
88% of Burglaries are Residential
The vast majority of burglaries are residential in nature. Thieves are generally after cash goods and other resellable items commonly found in homes. Here we’ve compiled a list of the entry points burglars like to use.
The Most Common Entry Points
- Front door (34%)
- First-floor window (23%)
- Back door (22%)
- Garage door (9%)
- Unlocked entrances (4%)
- Second-floor entrances (2%)
Securing these entry points will definitely help you save on your home insurance premiums. We’ll discuss why it works in a little while.
Items Most Commonly Stolen
Home insurance isn’t cheap. The following items are the reason why. You can lower the risk of these items being stolen by installing certain smart security features, which can lead to homeowners insurance discounts.
Commonly Stolen Items
- Cash
- Electronics
- Jewelry
- Medications
- Firearms or guns
- Tools
- Identification documents
- Cars
- Bikes
Most of these items are small and easy to transport. They’re also easy to hide. Thieves don’t want to be caught, but they also don’t want to leave empty-handed. They’ll try and take as many small expensive items possible. While cars are large items, the underground market for stolen parts has been on the rise according to a report by the National Insurance Crime Bureau (NICB). Thieves steal cars to strip them for parts.
When do Burglaries Happen?
Having some smart security installed at home will help you prevent burglaries when you aren’t there. This, in turn, will help lower home insurance costs. Interestingly enough, most burglaries don’t actually happen at night. According to the FBI, about 65% of home burglaries happen between 6 am and 6 pm. Burglars prefer times when the occupants of a home are at work or school. The most common time for a burglary is between 10 am and 3 pm. A victim is present in a burgled home in 30% of home burglaries.
Do Repeat Burglaries Occur?
Keep in mind when you’re seeking home insurance discounts that a few more factors are working against you. Police can only solve 13% of property crimes due to a lack of evidence or witnesses. Therefore, many thieves decide to repeat their former successes. 51% of homes suffer repeat burglaries within a month of the first incident. But smart security products will, first of all, prevent burglaries, and second, they’ll supply evidence to help catch the perpetrators. These statistics help justify lower insurance costs for protected homes.
Does Smart Security Prevent Burglaries?
Homes without security systems are 300% more likely to be broken into. Criminals don’t like their chances against sophisticated security systems. You can lower your risk of being burgled significantly by installing a smart security system, which will help you get a discount on your homeowners insurance.
Why Is Home Insurance so Expensive?
Insurance companies have shareholders. These companies need to make a profit every year to prove their profitability and keep their investors happy. But there’s a second group to serve as well. Insurance companies fork over billions per year to cover their customers’ claims. This is why they use risk models to determine the prices to charge.
Insurance companies have all kinds of ways to determine the risk you pose. For example, they determine the likelihood that your house will be broken into based on the demographic statistics of your neighborhood. By taking the crime rate, mortality rate, and other statistics (like how susceptible your house is to a natural disaster), they come up with your premium. Those with a lower risk profile will save on insurance.
What Are the Most Common Smart Security Products?
Smart home products are taking the world by storm. And smart security is a big part of the industry. Three out of five Americans buy smart home products (like a smart CCTV) that let them monitor their home via their smartphone.
Smart security doesn’t just save you money on your home insurance. It also helps you save on other things, like utility bills. Before we go into those statistics, let’s take a look at the most common smart security products.
Smart Alarm Systems
You have a good chance of getting a discount on your homeowners insurance for your alarm system. Smart alarms take the whole home security system and make it one functioning unit. Essentially, it connects all your different smart devices so they work in unison.
This provides you with a single point of access from which you can control your whole security system. Apps from all kinds of service providers and manufacturers can be used to interconnect your different products. Alerts from different units can set off the alarm. A smoke sensor can call the fire department, and a broken window will call the police. An integrated security system helps improve the overall level of security in your home.
Smart Security Cameras
A smart CCTV helps give you that extra piece of mind. It will also lead to cheaper home insurance. You can access it over something as simple as a smartphone. If you install these units at the entrances to your home, they will help keep an eye on things when you can’t.
This device also can to record what it captures. These images serve as evidence when you must report a crime. They’ll also help support a claim you have to make with your insurer. Then again, say you’re out of town for the day. You can check up on your dogs to see if they’re fine. Just open the app on your phone and see for yourself.
Smart Lights
Smart lights are a game changer. First, they help you save on your electricity bill. You can toggle light switches through another smart device. You can even program your lights to operate on schedules when you aren’t at home.
Finally, the ways they help with your security can lower home insurance quotes. Put simply, you can connect your smart lights to your smart security system. Motion sensors can trigger your lights to deter any unwelcome intruders. Or you can program certain lights to automatically switch on when your alarm system is triggered. This way, smart lights help lower both your electricity bill and your home insurance premium.
Smart Motion Sensors
Smart motion sensors coupled with your alarm system and smart lights create a proactive security system. They’re adept enough to know the difference between an animal and a human. Most importantly, they can detect intruders before they enter your home and then set off your alarm system or call for help. And buying these products together should get you a decent home security discount. In fact, several products and service providers have packages that include the whole system necessary to guard your home.
Smart Locks
Smart locks are some of the most used smart security products on the market. 63% of smart home product buyers use them to govern the access points to their homes. Forgot to lock the front door? Just do it over your phone. Need to open the door for a friend while you’re at work? No problem.
Smart locks are also integrated into your whole security system. Depending on your preferences, they will either lock or unlock the door depending on the emergency. A fire alarm could cause all locks to unlock. A triggered motion sensor could automatically lock the doors. These locks will also put your insurer at ease and help you save on home insurance.
Smart Smoke Sensors
Security systems aren’t the only devices that protect your property. There are others designed to help save your life. Carbon monoxide detectors and smoke sensors can also connect to the internet. Pair them with your security system, and you’ll lower your home’s risk profile. Not only does this save your property from being destroyed, but it will prevent personal harm. Smart sensors can even alert the fire department to come help.
Leak Detectors
Water leaks can cause lots of damage to a home, damage that an insurance company has to cover. But adequate flood sensors installed in the right places help lower that risk. Lowering your insurance needs this way will be music to your insurer’s ears. Plus, along with preventing water damage, you can save on your water bill. Pair these units with freeze detectors, and you’ll know when a pipe has burst. Better yet, install a smart thermostat to regulate your home temperature when you aren’t there.
Smart Thermostat
Now, this may not be a security-related product, but it can be integrated into your smart home security system. You can go onto your app to check the status of your security system, toggle the light switches, and change your home temperature to prevent your water pipes from bursting in the fall. Once again, your insurance company will appreciate every method you employ to lower the overall risk profile of your home.
How Can I Reduce My Homeowners Insurance?
So a lot has been said, but let’s make it easy. How can you reduce your home insurance costs? Here are the best ways available for you to try.
Improve Your Home Security System
If you don’t have a security system, you might want to consider buying one. As mentioned before, the probability of someone burgling your home decreases rapidly when you install this kind of system. Insurance companies know the risk is less, which will help in lowering your homeowners insurance premium for the service they provide.
Lower Your Risk Profile
Some things aren’t really a security matter, but they can still help you save on home insurance. Smart leak detectors, flood detectors, and smart thermostats help lower the chances that your house may suffer water damage. All these measures reduce the likelihood of you having to make any insurance claims in the first place. You don’t want to miss out on the benefits of home insurance. But you also don’t want to pay too much.
Don’t Over-Insure
Insuring your home is a balancing act. Of course, it could be devastating to miss the payout you need to repair certain damage to your home. But by over-insuring, you pay an unnecessarily high premium. You want to declare the value of your property and goods at their exact price. You won’t lose out when you make a claim, and you also won’t lose on your insurance premium.
Pay a Yearly Premium
Pay a yearly amount for your insurance service instead of paying monthly. You can ask for homeowners insurance discounts when you pay the amount upfront. You save if you can afford to pay the amount all at once.
Increase Your Excess Payment
An excess payment is the lump sum you need to pay before your insurer will pay out on a claim. There are many different ways in which an excess is calculated. But in short, it will lower the monthly (or yearly) premium you need to pay to your insurance company. The higher excess you pay, the less your insurer needs to cover.
However, don’t opt for an excess that you aren’t able to cover once you need to make a claim. Your insurance company won’t pay your claim if you can’t first pay the excess.
How Much Do You Save on Home Insurance with a Security System?
Let’s talk bottom line. What can you expect to save when the insurance bill arrives? First of all, most insurers require that your security system be professionally monitored before they enter into any discount talks. The majority of security packages offered by service providers have a monitoring service included. These features may reduce your premium by 25% if your insurance company recognizes the system you’ve installed.
Water and gas leak devices also help mitigate risk. Insurance companies rest easy knowing that your chances of stopping this kind of damage are higher. These devices (if recognized by your insurer) can save you about 10% on your insurance premium.
What Are Typical Homeowners Insurance Rates?
Each person has a different risk profile. People live in different areas and neighborhoods. They engage in different kinds of activities and the contents of their homes differ. This will all determine how much you pay for your insurance.
Your insurer will tally the total value of your goods and property (or at least that which you wish to insure). Then, depending on your risk profile, you will pay a percentage of the total value as your insurance premium. Currently, an average person in the US can expect to pay about $3.50 for every $1,000 they want insured.
Why Are There Home Insurance Increases Every Year?
The value of your home isn’t fixed—it changes every year. In rare circumstances, it’s even possible that your home value will decrease. However, as a rule, you can expect your home value to increase over time.
This means the total value for which you’re insured will have to increase alongside the value of your home. Remember, basically your home insurance payment is a percentage of the total value you’re insured for.
Perhaps you’ve bought more stuff, as well. The moment you require more things to be insured, you increase the total value of everything you’re insured for. This will, in turn, push up your premium. Still, as mentioned earlier, you don’t want to be underinsured because you won’t be able to repurchase or restore certain damaged or stolen possessions.
Do You Get Home Insurance Discounts if You Have a Security System?
By now this should probably have answered itself. The right smart security system will help you save on your insurance costs. This is because you lower your risk profile when you prove that your home and possessions are better protected. Make sure the security products and services are recognized by your insurer before you take the time to buy and install them.
While you will likely get a home insurance discount for your security system, you are also protecting your family. An insurance company helps pay the bill after a theft. But they can’t prevent the burglaries from happening. Smart security gives you the peace of mind you need while you’re away at work, and it helps keep everyone safe at night. Not to mention, it keeps an eye on things when you get to take a well-earned vacation.
So employ the extra tactics we’ve given you, and don’t miss out on the benefits of insuring your home. But do it right, and enjoy the home insurance discounts you’ll find after installing your smart security system.
