Chances are you have a variety of smart home devices in your home. Sales of smart home devices, which measure in the billions of dollars, have increased every year for the last four years and are projected to continue to grow. Nearly 30% of homes are considered smart homes.
Smart home devices not only provide you with increased convenience and safety, but also potential savings on your insurance premiums.
What is a Smart Home Device?
A smart home device is a device that connects to the internet via a wired or WiFi connection. Examples of smart home devices include plugs, light bulbs, leak detection sensors, water-service control devices, thermostats, door locks, security cameras, and doorbells. Increasingly, appliances and houses are being designed with smart technology already baked-in.
With a smart home device, homeowners can remotely monitor and manage various functions in the house using their computer or cell phone. Smart home devices are manufactured by a variety of companies and are readily available for purchase in-store and online.
Even “traditional” centrally monitored security service companies, like ADT, offer various levels of smart-home upgrades such as a mobile app that allows the homeowner to view activity in their home, arm/disarm the alarm, check the activity logs of door and motions sensors, and receive instant notifications when the system is triggered.
Why Do Insurance Companies Offer Discounts for Smart Home Devices?
Insurance companies offer discounts on smart home devices because these devices save them money in the form of fewer and less expensive claims. The increased monitoring and management of the home that the devices provide has the potential to limit or prevent damage to the home or even loss of life.
For example, a connected video surveillance system can give an out-of-town homeowner a chance to prevent or mitigate loss in a home intrusion. When the surveillance system detects motion, it immediately sends an alert to the homeowner’s smartphone. The homeowner opens the app and sees a live-stream of the intruder walking through the house. They can then call the police to intervene in the home intrusion rather than discovering the intrusion after it occurred.
Another example would be a smart water detection device attached to a hot water heater. This device can give a homeowner the chance to avoid a costly flood. When the device detects water, it immediately sends an alert to the homeowner’s smartphone. They can then shut off the water with just a puddle on the floor rather than after discovering a flooded room. There are also some devices that can automatically shut off the water when the leak is detected.
Less damage means a less costly insurance claim, or perhaps even no claim, which means less pay-out by the insurance company. These savings allow insurance companies to offer the discounts on insurance premiums. In addition to directly saving you money on your insurance premium, smart devices can also save you money by limiting damage in your home and saving you the headache of having to replace all of your items.
Am I Eligible for a Discount?
The short answer is – give us a call to find out. Whether you are eligible for a discount depends on your location, insurance carrier, and the type of security and smart home devices in your home. One of our friendly and knowledgeable representatives will be happy to review your policy and let you know what discounts may be available to you based on the devices in your home.
The biggest discount is still likely going to be on a whole-home alarm system that is centrally monitored by an outside service. These systems have been around for some time, giving insurance companies the history and data necessary to determine the value they bring in preventing damage and loss. Keep in mind that some centrally monitored alarm systems may be upgraded with smart features that allow you to self-monitor and control the system while still benefiting from central monitoring, which may also factor into available discounts. Discounts are often smaller for newer devices as insurance companies don’t have a large history of losses to analyze for cost savings. However, as these devices continue to gain popularity, the discounts offered may increase.
Eligibility for discounts on individual off-the-shelf devices, such as door locks, surveillance cameras, and water detection sensors, will depend on your insurance company. Before purchasing, call your agent to find out which devices your current insurance company offers discounts for.
One of the great things about having an insurance agent is they can do the shopping for you. If you install a smart home system, your insurance agent can compare rates of various companies to see where the best discount is offered for the devices you installed.
Keep in mind though, if you already receive a discount for a using a centrally monitored alarm system, you may not be able to receive an additional discount for adding smart home devices.
The use of smart home devices is growing every year. Some insurance companies offer discounts for using smart home devices. If you already use smart home devices, you may be eligible for a discount on your insurance premium. To find out, speak with your agent.
If you do not use smart home devices but are considering using them, the insurance discount can be considered an extra incentive. Remember that centrally monitored alarm systems and water detection devices will produce more savings than individual smart devices.
Smart home device technology continues to advance and usage of these devices continues to grow. Looking forward, as insurance companies continue to measure the impact of smart home devices on preventing the loss of property and life, discounts on insurance premiums will likely increase. As a homeowner, you should take advantage of these savings in addition to the benefit you receive by having the added convenience and security of managing your home from your phone. If you are unsure whether you are already receiving this discount or are eligible, call and talk to an agent at American Heritage Insurance Group.
Article By: Tony diFrancesca