Security System Insurance Discounts in NJ & PA (2026)
Your security system does more than protect your home — it can save you hundreds of dollars every year on homeowners insurance. Here is exactly how NJ and PA homeowners are saving 5-20% on their premiums, which systems qualify, and how to claim your discount today.
Smart security devices like cameras, monitoring hubs, and environmental sensors qualify for insurance discounts. Photo by Jakub Zerdzicki / Unsplash.
The Bottom Line on Security System Insurance Savings
A professionally monitored security system qualifies most NJ and PA homeowners for a 5-20% discount on homeowners insurance — saving $60 to $300 per year depending on your premium and carrier. Over 10 years, that is $600 to $3,000+ in cumulative savings, often enough to pay for the system itself.
How Security Systems Lower Your Insurance Premiums
Insurance companies are in the business of managing risk. When you install a security system, you are measurably reducing the likelihood of a successful burglary, fire, or water damage event at your property — and insurers reward that reduced risk with lower premiums.
The logic is straightforward: homes with professionally monitored security systems are significantly less likely to be burglarized. The FBI reports that homes without security systems are up to 300% more likely to be broken into. For insurance carriers, fewer break-ins mean fewer claims — and they pass part of that savings on to you.
Across the industry, monitored security systems earn homeowners an average 5-20% discount on their homeowners insurance premium. The exact percentage depends on three factors:
- Type of system: A basic local alarm earns a smaller discount than a comprehensive monitored system with fire, intrusion, and environmental sensors.
- Monitoring level: 24/7 professional monitoring through a UL-Listed central station earns the highest discounts. Self-monitored and unmonitored systems earn little to nothing.
- Carrier policy: Each insurance company sets its own discount structure. NJ-based NJM Insurance and PA-headquartered Erie Insurance both offer competitive security discounts.
Why NJ and PA Carriers Are Generous With These Discounts: New Jersey and Pennsylvania both have higher-than-average property crime rates in certain metro areas. Carriers serving Mercer County, Bucks County, and Ocean County know that security systems in these regions deliver real claim reductions — so they offer meaningful discounts to incentivize installation.
Which Security Systems Qualify for Insurance Discounts
Not all security systems earn the same discount. Here is what insurers look for, from the highest-value systems to the basics.
Monitored Alarm Systems (Highest Discounts: 10-20%)
Professional 24/7 monitoring earns the biggest insurance savings because it guarantees emergency dispatch — the factor that most reduces claim severity.
What Qualifies:
- UL-Listed central station monitoring — the gold standard insurers require. Security Dynamics operates a UL-Listed monitoring center that meets this requirement.
- Intrusion detection sensors — door/window contacts, motion detectors, and glass break sensors covering all entry points.
- Two-way communication — the central station can verify alarms and communicate with emergency responders.
- Certificate of Alarm Installation — your monitoring company issues this document, which you provide to your insurer as proof of active monitoring.
Pro Tip: When shopping for a security system, ask the provider if they issue a Certificate of Alarm Installation. Reputable companies like Security Dynamics provide this automatically — it is the document your insurer needs to apply the discount.
Video Surveillance Systems (5-10% Alone, Higher When Bundled)
Cameras provide recorded evidence that reduces claim costs and deters criminal activity — both factors insurers value.
Video surveillance alone may earn a small discount with some carriers, but the real value comes when cameras are integrated with a monitored alarm system. This combination allows the central station to visually verify alarms, reducing false dispatches and improving response accuracy.
- Cameras only (no monitoring): 2-5% discount with select carriers
- Cameras + monitored alarm system: 10-20% discount (bundled rate)
- Visual alarm verification: Some carriers offer an additional premium reduction when camera feeds are linked to the monitoring station
Smart Home Security Integration (Bonus Savings)
Modern smart home security systems bundle multiple protective features that some carriers reward individually.
- Smart locks — automated locking reduces the risk of accidentally leaving doors unlocked
- Door and window sensors — real-time alerts for every entry point
- Water leak detection — particularly valuable in NJ, where water damage claims are common. Some carriers offer a separate water damage discount for leak sensors.
- Bundled systems — a fully integrated smart home security setup (alarm + cameras + smart locks + environmental sensors) qualifies for the maximum carrier discount
Fire and Environmental Monitoring (Stackable Discounts)
Fire monitoring discounts are often separate from burglar alarm discounts — and they stack. This means you can earn both.
- Monitored smoke and heat detectors: 2-5% additional discount with most carriers
- CO detectors tied to monitoring: further reduces risk profile
- Water leak sensors: especially valuable in NJ flood-prone coastal and river areas (Ocean County, along the Delaware River in Bucks County). Some carriers offer a distinct water damage discount.
- Freeze sensors: alert you before pipes burst in winter — preventing one of the most expensive homeowner claims
Stacking Example: A Mercer County homeowner with a monitored burglar alarm (10% discount) plus monitored fire detection (3% discount) plus water leak sensors (2% discount) could earn a combined 15% reduction — saving roughly $195 per year on a $1,300 annual premium.
Insurance Discounts by Carrier in NJ and PA
Discount amounts vary by carrier. Here are typical security system discount ranges from the major insurers serving New Jersey and Pennsylvania homeowners.
| Insurance Carrier | Typical Discount | Notes |
|---|---|---|
| State Farm | 5-15% | Requires monitored alarm; higher discount for fire + burglar combo |
| Allstate | Up to 5% | Protective device discount for smart and monitored security systems |
| Liberty Mutual | 5-10% | Discount for alarm systems (varies by state); additional credit for sprinklers |
| NJM Insurance | Varies | NJ-headquartered mutual carrier (also serves CT, MD, OH, PA); offers protective device discount — contact for current rates |
| Erie Insurance (PA HQ) | 5-10% | PA-headquartered carrier; offers security system and fire alarm discounts |
| Travelers | 5-10% | Monitored alarm discount plus smart home device credits |
| USAA | Up to 20% | Among the highest discounts; military/veteran families only |
How to Ask Your Insurance Agent About Security Discounts
Call your agent and ask these specific questions:
- "Do you offer a protective device discount for a monitored burglar alarm system?"
- "Is there a separate discount for monitored fire and smoke detection?"
- "Do you offer additional credits for water leak sensors or smart home devices?"
- "What documentation do you need? Will a Certificate of Alarm Installation work?"
- "When does the discount take effect — at renewal or immediately?"
Find Out What Discount Your System Qualifies For
Security Dynamics provides a Certificate of Alarm Installation with every monitored system — the document your insurer needs to apply your discount. We have been helping NJ and PA homeowners save on insurance for 41 years.
How to Claim Your Security System Insurance Discount
Claiming your discount is straightforward — but many homeowners miss savings simply because they never inform their insurer. Follow these three steps.
Get Your Certificate of Alarm Installation
After your security system is installed and monitoring is active, your security provider issues a Certificate of Alarm Installation. This document confirms:
- Your system type — burglar alarm, fire alarm, or both
- Monitoring status — active 24/7 professional monitoring
- Central station details — UL-Listed station name and license number
- Installation date — when monitoring began
Security Dynamics provides this certificate automatically to all monitored customers at no charge. If your current provider has not given you one, call and request it.
Contact Your Insurance Agent
Call your homeowners insurance agent or log into your carrier's portal. Provide the Certificate of Alarm Installation and ask for:
- The protective device discount for your monitored alarm system
- Any additional fire monitoring discount if your system includes smoke/heat/CO detection
- Any water damage discount for leak sensors (ask specifically — not all agents mention this)
Some carriers apply the discount immediately; others apply it at your next renewal. Ask when it takes effect.
Verify the Discount Is Applied
After submitting your certificate, check your next policy declaration page to confirm the discount appears. Look for line items such as:
- "Protective Device Discount"
- "Burglar Alarm Credit"
- "Fire Alarm Credit"
- "Central Station Monitoring Discount"
If the discount does not appear, call your agent. Missing discounts are one of the most common insurance oversights — a 5-minute phone call could save you $100+ per year.
Real Savings: What NJ and PA Homeowners Can Expect
Here is what the numbers look like for typical homeowners in our service area.
New Jersey Homeowner
- Average annual premium:~$1,300–$1,500
- Typical security discount (10%):-$130–$150/year
- With fire monitoring (add 3%):-$169–$195/year
- 10-year savings (10% only):$1,300+
Pennsylvania Homeowner
- Average annual premium:~$1,200–$1,400
- Typical security discount (10%):-$120–$140/year
- With fire monitoring (add 3%):-$156–$182/year
- 10-year savings (10% only):$1,200+
Break-Even Analysis: System Cost vs. Insurance Savings
A professionally installed and monitored home security system typically costs $500 to $2,500 for equipment and installation plus $25-$60 per month for monitoring. Here is how the insurance savings offset those costs:
Annual Insurance Savings
$120-$260
depending on system & carrier
Annual Monitoring Cost
$300-$720
$25-$60/month
Net Annual Cost After Savings
$180-$460
for 24/7 professional protection
When you factor in the insurance savings, the effective cost of 24/7 professional monitoring drops significantly. And that calculation does not include the value of prevented burglary losses — the average property loss from a home burglary is over $2,800 according to FBI data.
Business Security Systems and Commercial Insurance Savings
Commercial property insurance discounts work similarly to homeowners discounts, but the savings can be substantially larger because commercial premiums are higher.
Businesses in Trenton, Hamilton Township, Princeton, and throughout Mercer County and Bucks County can expect:
- Commercial property insurance discounts: 5-15% for monitored alarm and video surveillance systems. Warehouses, retail stores, and office buildings with comprehensive intrusion detection and video surveillance often qualify for the highest tiers.
- Workers compensation considerations: Access control systems that limit unauthorized entry and video surveillance that documents workplace incidents can support lower workers comp claims, though direct premium discounts vary by carrier.
- Liability insurance benefits: Documented video evidence from surveillance systems helps resolve slip-and-fall claims, vandalism disputes, and other liability incidents faster and at lower cost.
For a customized commercial insurance savings analysis, contact Security Dynamics for a free commercial security assessment.
Frequently Asked Questions
Do all insurance companies offer security system discounts?
Most major carriers do, though amounts vary from 2% to 20%. In NJ and PA, carriers like State Farm, Allstate, Liberty Mutual, NJM Insurance, and Erie Insurance all offer some form of protective device discount. The key requirement for the largest discounts is professional 24/7 monitoring through a UL-Listed central station. Contact your specific agent to confirm your carrier's discount structure and documentation requirements.
Does a DIY security system qualify for insurance discounts?
Some DIY systems qualify for small discounts (2-5%), but most carriers reserve their largest discounts (10-20%) for professionally installed and monitored systems. The difference is emergency dispatch capability — a self-monitored Ring or SimpliSafe system sends alerts to your phone, but there is no guaranteed professional response. Insurers value the certainty of a UL-Listed central station dispatching police, fire, or EMS on your behalf. Read our full comparison of DIY vs. professional security systems.
Do I need professional monitoring to get the discount?
For the maximum discount (10-20%), yes. Professional 24/7 monitoring through a UL-Listed central station is what most carriers require. Some carriers offer a smaller discount (2-5%) for a local-only alarm that sounds a siren but does not contact a monitoring station. The Certificate of Alarm Installation from your monitoring company is what proves active monitoring to your insurer.
How much can I save with a security system on my homeowners insurance?
In New Jersey, where the average homeowners insurance premium is approximately $1,300 to $1,500 per year, a 10% security system discount saves about $130 to $150 annually. In Pennsylvania, the average premium of roughly $1,200 to $1,400 yields about $120 to $140 per year in savings. Add fire monitoring and water leak detection for potential stacking to 15-20%, pushing savings to $180-$300 per year. Over 10 years, that is $1,200 to $3,000 or more in cumulative savings.
Does a Ring doorbell qualify for an insurance discount?
A Ring doorbell by itself typically does not qualify for a meaningful insurance discount. Most carriers require a complete security system with professional central station monitoring, intrusion detection sensors on doors and windows, and emergency dispatch capability. A Ring doorbell is a single camera device. However, pairing a Ring doorbell with a full professionally monitored alarm system can qualify for the combined discount.
Do security cameras lower insurance in NJ?
Security cameras alone may earn a small discount (2-5%) with some NJ carriers. The real insurance value comes when cameras are part of a monitored system with intrusion detection and emergency dispatch. Cameras reduce claim costs by providing recorded evidence of incidents, which insurers appreciate. For the maximum discount, combine cameras with a professionally monitored burglar alarm, fire detection, and environmental sensors.
Start Saving on Your Insurance Today
Security Dynamics has helped NJ and PA homeowners and businesses save on insurance for 41 years. Every monitored system includes a Certificate of Alarm Installation at no extra cost. Get a free quote and find out how much you can save.
(609) 394-8800 | Licensed NJ Fire Alarm (P00747) & Burglar Alarm (34BA00089500) | Serving Mercer County NJ, Bucks County PA & Ocean County NJ
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