Homeowners insurance is one of the largest recurring bills tied to your property, and installing a monitored home security system is one of the few variables you can control to bring that premium down. Most major U.S. carriers offer a discount between 2% and 20% for qualifying systems, and the savings stack on top of other credits like bundling, claims-free history, and smart-home device credits. For the average American household paying roughly $1,400 per year in homeowners coverage, that translates into real, repeatable savings that often cover the cost of monitoring outright.
How Much Can You Actually Save?
According to the Insurance Information Institute, the average U.S. homeowners insurance premium was approximately $1,428 in 2024, with coastal and wildfire-prone states trending significantly higher. Carriers reward risk reduction, and a professionally monitored alarm system measurably reduces the expected loss from burglary, fire, and water damage. The discount typically applies to the dwelling and personal-property portions of the policy.
Here is a simple example of the math using a mid-range discount:
- Annual premium: $1,400
- Qualifying monitored-alarm discount: 15%
- Annual savings: $210
- Ten-year savings (assuming flat premium): $2,100
Because most monitored security systems run $20 to $50 per month, a 10-20% premium credit can offset a meaningful share of the ongoing monitoring fee.
Discount Ranges by Major U.S. Insurer
Discount percentages vary by carrier, state filing, and the specific devices installed. The table below reflects commonly published ranges from carrier websites and state rate filings as of 2026. Always confirm the exact credit with your agent before you buy.
| Insurer | Typical Discount Range | Qualifying Requirements |
|---|---|---|
| State Farm | Up to 10% | Central-station monitored burglar alarm; additional credit for fire/smoke monitoring |
| Allstate | 5% to 15% | Monitored system; smart-home bundle credit available |
| USAA | Up to 5% | Central-station monitoring and fire alarm |
| Liberty Mutual | Up to 15% | Professionally monitored alarm plus protective devices |
| Nationwide | 5% to 15% | Monitored burglar/fire; smart-home discount through Notion partnership |
| Farmers | Up to 5% | Central-station alarm and deadbolts |
| Progressive | Up to 5% | Monitored alarm; larger credits in select states |
| Travelers | Up to 5% | Central-station monitoring and smoke alarm |
Self-Monitored vs. Professionally Monitored
Most carriers require central-station professional monitoring to issue the full discount. A doorbell camera, a DIY alarm with no dispatch service, or a smart-home app alone typically earns a smaller "protective device" credit (often 2-5%) rather than the full alarm credit. If insurance savings are a primary motivator, see our comparison of self-monitoring vs. professional monitoring.
The Certificate of Alarm Installation
To claim the discount, your insurer will ask for a Certificate of Alarm (sometimes called an Alarm Certificate or Certificate of Installation). This one-page document is issued by your security provider and lists:
- The monitoring company name and UL listing, if applicable
- Central-station contact number and account ID
- Covered perils (burglary, fire, environmental)
- Installation date and customer address
- Whether the system is local-only or reports to a central station
Companies like ADT, Vivint, SimpliSafe, and Frontpoint will email the certificate on request, usually within 48 hours. Forward it to your insurance agent and ask them to re-rate the policy; savings are generally applied at the next renewal, though some carriers issue a prorated mid-term credit.
State-by-State Variation
Insurance is regulated at the state level, so the maximum permitted discount and the definition of a qualifying system vary. Florida, California, and Texas generally allow the highest credits (up to 20% in some filings) because carriers price aggressively against theft and fire risk in those markets. Northern states with lower burglary rates often cap the discount at 5-10%. Always confirm the specific rate filing that applies to your ZIP code.
How to Maximize the Discount
- Choose a monitored system with both burglar and fire/environmental monitoring. Water-leak sensors frequently trigger additional credits.
- Request the alarm certificate immediately after installation and submit it before your next renewal.
- Stack credits: smart locks, video doorbells, and leak detectors may qualify for separate smart-home discounts.
- Recheck annually. Carriers update filings, and insurers like Nationwide periodically sponsor free device programs with partners.
- Bundle auto and home with the same carrier to compound savings.
When a Security System Does Not Pay for Itself
If you self-install a basic DIY kit without monitoring, expect a small protective-device credit rather than a full alarm discount. Renters' policies also generally offer smaller credits because the dwelling itself is not covered. For a full decision framework, our buyer's guide walks through which features drive insurance savings versus which are purely convenience features. You can also review our testing methodology to understand how we score monitored systems for overall value.
For additional safety upgrades that insurers reward, see our guides to home fire prevention and carbon monoxide safety.