Home Insurance and Alarm Systems

April 13, 2016

Everyone wants to save money, but to save money while increasing the safety of your family and protecting your property is an added bonus. For decades security systems have been regarded as effective deterrents against home burglaries; so much so that some insurance companies offer discounts when a home has one installed.

According to this article, the Insurance Information Institute (I.I.I.) recommends that homeowners invest in a monitored security system to alert the police or fire department in the event of an emergency. This article and a brochure from I.I.I. report that homeowners who invest in a sophisticated alarm system could see insurance discounts of 15 to 20 percent.

"The majority of insurance companies offer discounts for alarm systems," said Michael Barry, spokesperson for I.I.I. "Homeowners should check with their individual carriers to determine the amount and availability of the discounts."

Two studies funded by the Electronic Security Association's (ESA) research arm, the Alarm Industry Research and Educational Foundation (AIREF), demonstrate the value of security systems and why insurance companies would want to offer discounts.

The first study was conducted by Rutgers University School of Criminal Justice in Newark, N.J. Entitled "The Impact of Home Burglar Alarm Systems on Residential Burglaries," the study reported that an alarmed single family home is more than 60 percent less likely to be burglarized than a similar home without an alarm.

A more recent study conducted by the University of North Carolina at Charlotte in Charlotte, N.C., also confirmed that security systems are effective crime prevention tools. More than 420 incarcerated burglars were interviewed for the study entitled, "Understanding Decisions to Burglarize from the Offender's Perspective." Approximately 83 percent of the offenders said they would attempt to determine if an alarm was present before committing a burglary and 60 percent said if the home was equipped with an alarm they would seek an alternative target.

In addition to discouraging burglars, monitored alarm systems protect lives and property during fires. Alarms triggered by fire notify fire departments sooner, leading to saved lives and reduced damage. According the National Fire Protection Association (NFPA), in 2013 there were more than 487,500 structure fires that caused nearly $9.5 billion [SM2] in property loss. Fire, lightning and debris removal are the costliest claims with an average claim of $34,306 per incident, according to I.I.I.

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