Home Insurance Savings by Security System Tier
Not all security systems are created equal, and the possible discount ranges reflect the protection that each tier provides. Here’s a table of common security system tiers and the possible discounts they can give:
| Security Tier | Common Discount Range | Notes |
|---|---|---|
| Basic local or DIY alarm | 2 - 5 % | Non-monitored: siren only, self-installed. |
| Professionally monitored intrusion alarm | 5 – 10% | Central station alerts law enforcement or security. |
| Monitored intrusion + fire or flood sensors | 10 – 15% | Adds protection against fire, carbon monoxide (CO), water along with higher premium savings. |
| Full smart setup (video, multi-sensors, dispatch) | 15 – 20% | Cameras, AI smart alerts, automated dispatch, mobile access. Provides highest possible insurance discount. |
Security System ROI Calculator (Yearly Cost vs. Insurance Savings)
Over time, the insurance premium discount you receive from installing a security system could offset the total cost, especially if you choose a basic system with no monthly fees. However, for more advanced setups, particularly those with monthly monitoring costs, the insurance discount often isn’t enough to fully cover both the installation and ongoing expenses.
In the table below, we assume:
- You’re receiving the maximum insurance discount available for each security system tier.
- You’d like to recover your total costs (upfront plus 5 years of fees) through insurance discounts over a 5-year period.
- The “Break-Even Annual Premium” indicates approximately how high your home insurance premium would need to be for the discount to cover the cost of your system within that timeframe.
| Security System Tier | Upfront Cost | Monthly Fee | Total 5-Year Cost | Yearly Insurance Discount | Break-Even Annual Premium |
|---|---|---|---|---|---|
| Basic local or DIY alarm | $200 | $0 | $200 | 5% | $800/year |
| Professionally monitored intrusion alarm | $200 | $20 | $1,400 | 10% | $2,800/year |
| Monitored intrusion + fire or flood sensors | $350 | $38 | $2,630 | 15% | $3,507/year |
| Full smart setup (video, multi sensors, dispatch) | $450 | $49 | $3,390 | 20% | $3,390/year |
Geographic Impact: Bigger Discounts in Higher-Crime Areas
On average, there are over 130,000 incidents of breaking and entering in Canada, making it one of the most common reported crimes in the country.
When insurers determine your home insurance premiums, the location of your home is one of the most important factors. The same is true when your insurer determines your home insurance discount from a security system. The more high-risk a neighbourhood is, the more effective security systems will be at lowering that risk, thereby giving a higher discount. If crime in your area is elevated, the incremental discount from each extra sensor or monitoring tier becomes even more valuable.
In neighbourhoods with higher burglary risk, insurers may offer larger discounts within their available range, especially for professionally monitored systems. Conversely, the discount can be minimal in safer areas due to the inherently lower risk profile of the neighbourhood.
Bundling Smart Devices for Bigger Discounts
Making your home smarter makes it more convenient, but did you know that smart home features can also save you money on insurance premiums? Insurers often offer higher savings when multiple smart devices work together as part of a connected system. For example, combining a monitored intrusion alarm with fire, smoke, and flood sensors can push your discount into the 10 – 15% range or more.
Adding smart locks, video doorbells, motion-activated lighting, and even leak detectors creates a layered defence that insurers reward with better rates. Some insurers even have partnerships with specific smart home providers, making it easier to qualify for bundled discounts. Just make sure your system is centralized and supported by reliable software and monitoring services.
The Role of Cybersecurity in Home Security Discounts
While smart features bring considerable convenience to a home, they also introduce vulnerabilities that tech-savvy criminals can exploit. Insurers are taking note of these weak spots and consider them when calculating potential insurance discounts. Here’s what they look out for:
The Impact of Security Systems on Condo and Rental Insurance
While we’ve been talking about security systems in the context of home insurance, they can also offer potential discounts on condo and renters’ insurance. For condo insurance, many providers offer discounts if your unit is equipped with monitored alarms or smart sensors that detect fire, carbon monoxide (CO), or water leaks. In some cases, the condo building’s overall security infrastructure may also qualify you for a reduced rate, mainly if it includes 24/7 surveillance, fob entry, or on-site security personnel.
Renters can also receive insurance discounts for installing security systems. Installing a basic smart device – such as a video doorbell, motion sensor, or smart lock – can make renters eligible for small but effective discounts, especially when combined with other low-risk factors like smoke detectors and sprinkler systems. While the savings may not be as high as for standalone homes, they still contribute to a lower premium and a safer living environment.
Key Advice from MyChoice
- Security systems are a strong deterrent, but they aren’t infallible. Theft and break-in coverage is still essential to protect yourself properly.
- Different insurance providers offer varying discount rates for security system installation. Use MyChoice’s online home insurance comparison tool to find the best insurance discounts.
- Condo owners and renters may also be eligible for insurance discounts for installing security systems, especially if the property is located in a high-risk area.