Which security systems actually reduce your insurance bill

Most insurers offer discounts when you install a monitored security system, but the discount depends on what the system does and whether the monitoring company reports to the police. A professionally monitored system that alerts a central station and dispatches responders typically earns you 5 to 15 percent off your homeowners insurance, though the exact amount varies by insurer and state. Self-monitored systems (where you get alerts on your phone but no company watches 24/7) usually earn smaller discounts or none at all, because insurers care less about a system nobody is actively watching.

The systems that matter most to insurers are those that detect break-ins, not just fire or carbon monoxide. A burglar alarm monitored by a UL-certified central station — meaning the monitoring company meets Underwriters Laboratories standards — is what most insurers recognize. Some insurers also discount for glass-break sensors, door and window sensors, and motion detectors, but the burglar alarm itself is the main lever. Before you buy, call your insurer and ask which systems they recognize and what discount each one earns. The discount amount matters because a $50-a-month monitoring fee only makes sense if it saves you $60 or more per year on insurance.

Key Takeaways

  • Professionally monitored burglar alarms from UL-certified companies typically save you 5 to 15 percent on homeowners insurance, though the exact discount varies by insurer.
  • Self-monitored systems where you receive alerts but no company watches 24/7 usually earn smaller discounts or none, because insurers prioritize active monitoring.
  • You should contact your insurer before buying to learn which specific systems they recognize and what discount each one provides.
  • The annual insurance savings must exceed the monthly monitoring cost for the system to make financial sense.
  • Some insurers also discount for additional sensors like door and window contacts or glass-break detectors, but the burglar alarm is the primary discount driver.

How insurers verify and discount monitored systems

When you install a monitored system, the monitoring company typically sends your insurer a certificate showing that your alarm is active and being watched. Your insurer then applies the discount to your next renewal. The discount usually appears as a line item on your policy, and you keep it as long as the monitoring stays active. If you cancel monitoring, the discount goes away at your next renewal.

Some insurers require the system to be installed by a licensed professional, while others accept DIY systems as long as they are monitored by a UL-certified station. A few insurers have preferred vendors — companies they have negotiated with — and may offer a larger discount if you use one of those vendors. It is worth asking whether your insurer has preferred partners, because you might save more by choosing their recommendation than by picking the cheapest system yourself.

The monitoring company's response time and certification matter. UL-certified monitoring means the central station meets specific standards for staffing, backup power, and communication protocols. Some insurers also require the monitoring company to be bonded and insured. If you choose a monitoring company that does not meet your insurer's standards, you may not get the discount even if you have the system installed.

Popular monitored systems and what they cost

ADT and Vivint are the largest national monitoring companies and are recognized by most insurers. ADT typically charges $35 to $60 per month for monitoring, plus installation fees that range from $200 to $500 depending on the size of your home. Vivint is similar in price but often bundles monitoring with video cameras and smart home features, which can raise the total cost. Both companies have long-term contracts, usually 36 months, and early termination fees if you cancel.

Frontpoint and Abode offer more flexible contracts with month-to-month options. Frontpoint charges around $25 to $45 per month and is recognized by most major insurers. Abode is similar in price and allows you to choose between professional monitoring and self-monitoring, so you can start with professional monitoring to get the insurance discount and switch later if you want to lower costs. Both companies charge less for installation because they focus on DIY setup.

Local alarm companies in your area may also offer monitoring and could be cheaper than national brands. The trade-off is that local companies may not be recognized by all insurers, so you need to check with your insurer first. Some local companies are UL-certified and bonded, which makes them acceptable to insurers even if they are not household names.

Calculating whether the discount pays for itself

To decide whether a monitored system makes financial sense, compare the annual monitoring cost to the annual insurance savings. If your homeowners insurance is $1,200 per year and your insurer offers a 10 percent discount for a monitored alarm, you save $120 per year. If the monitoring costs $40 per month, that is $480 per year, so the system costs you an extra $360 per year out of pocket. In this case, the discount does not cover the monitoring fee.

However, if your insurer offers a 15 percent discount, your savings jump to $180 per year, which still does not cover a $480 monitoring bill. But if you have a higher-value home or live in an area with higher insurance rates, the discount could be larger. A $2,000 annual premium with a 15 percent discount saves you $300 per year, which gets closer to the monitoring cost. The math works best for homeowners with higher insurance premiums or those who live in areas where insurers offer larger discounts for security systems.

You should also factor in whether you want the system for reasons beyond the insurance discount. If you value the peace of mind of 24/7 monitoring, the ability to check your home remotely, or integration with cameras and smart locks, the system has value even if the discount does not fully cover the cost. But if your only reason for buying is the insurance savings, do the math first.

Other security features that may lower your premium

Beyond monitored alarms, some insurers discount for deadbolt locks, security cameras, and smart door locks. These discounts are usually smaller — 2 to 5 percent — and vary widely by insurer. A few insurers discount for smart home systems that let you control locks and lights remotely, because they see these as theft deterrents. Ask your insurer what other features they recognize before you buy.

Fire and smoke detection systems also earn discounts, though these are separate from burglar alarms. If your home already has a monitored fire alarm, you may already be getting a discount. Adding a burglar alarm on top of that could earn you an additional discount, so ask your insurer whether the discounts stack.

What to ask your insurer before you buy

Contact your insurer and ask these specific questions: What is the discount percentage for a monitored burglar alarm? Do they require the system to be installed by a licensed professional, or do they accept DIY systems? Which monitoring companies do they recognize? Do they have preferred vendors with larger discounts? What certification or bonding do they require from the monitoring company? Do discounts for other features like cameras or smart locks stack with the alarm discount?

Get the answers in writing if possible, because discount policies change and you want documentation if there is a dispute at renewal. Some insurers have this information on their website, but a phone call to your agent is usually faster and more reliable. Once you know what your insurer recognizes and what the discount is, you can shop for systems that meet those requirements and calculate the true cost.

Frequently Asked Questions

Do I need a long-term contract to get the insurance discount?

No. Your insurer cares that the system is monitored, not how long your contract is. However, most national monitoring companies require 36-month contracts. If you want flexibility, look for companies like Abode or Frontpoint that offer month-to-month monitoring, though you should confirm your insurer recognizes them before signing up.

What happens to my discount if I move?

The discount usually transfers to your new home if you keep the same monitoring service and your new insurer recognizes it. However, you should contact your new insurer before moving to confirm they recognize your system. If they do not, you may need to switch to a monitoring company they prefer.

Can I get a discount for a system I already have?

Yes, if it is monitored by a UL-certified company. Contact your insurer with proof of monitoring (usually a certificate from the monitoring company) and ask them to add the discount to your policy. The discount typically starts at your next renewal.

Do smart home systems like Ring or Wyze earn discounts?

Most insurers do not recognize self-monitored video systems for discounts because nobody is actively watching 24/7. However, some insurers offer small discounts for cameras as a deterrent. Call your insurer to ask whether they discount for the specific system you are considering.

What if my insurer does not offer a discount for security systems?

Some smaller or regional insurers do not offer security discounts. If yours does not, a monitored system may not make financial sense unless you want it for other reasons like remote access or integration with smart home features. You can also shop for a new insurer that does offer the discount.