How Smart is a Smart Home? Smart Home and Insurance

It is no secret that we live in the era of technology, with new innovations happening around us every day. The countless products and wireless capabilities are helping us lead easier, faster and more exciting lives! With everything from self-driving cars to controlling your entire home with a mobile app, it can be a very enticing to want to equip your home with the newest smart home technology. As the market grows rapidly, you may be wondering how things like smart home technology and insurance play a role, and if that impact should deter you from installing these features in your own home.

What exactly is a smart home?

A smart home is a setup where appliances and other devices can be controlled remotely by a phone or computer from any place that is internet-connected. Also known as “home automation” and “smart building”, a smart home can control everything from lighting and heating to door locks and security systems. There are several exciting features involved in smart homes that add great benefits to the functionality and safety of your home. These features include:

• Smart Locks – A smart lock can be locked and unlocked by a quick passcode on your door, or by your mobile device. These locks prevent you from needing to hide a key under the mat, or in the plant next to the front door. Smart locks can give you notifications when someone enters your home, while giving you the ability to grant access to visitors.
• Security – Smart security systems have so many great benefits to help you feel safer in your home. Sensors and internet-connected cameras can alert you when someone tries to break in, call home owners and law enforcement authorities, and save photographs or video footage. Even just having outdoor cameras can deter thieves from stealing any valuables you keep outside of the house. Camera doorbells are also effective in monitoring who is at your door and deterring package thieves.
• Water – One of the best benefits of smart home technology is the ability to help prevent a home from damage, especially water damage. Two different sensors can be installed, one to detect a leak, and the other to allow you to shut off the main water supply remotely. These sensors can notify you by email or on your phone to be able to solve the problem as soon as it starts.
• Lighting and Heating – Being able to turn off your lights or control the temperature of your home remotely is a great way to reduce your consumption and save money. Never worry about forgetting to turn the lights off again!
• Fire alarms – Fire alarms are extremely important when it comes to safety in your home. Connecting your fire alarm to your smart phone can notify you of flames or smoke, contact emergency services immediately and even shut off appliances whether you are home or not.

What role does your home insurance play?        

How can installing these features impact your insurance? For the most part, it is about mitigating risk. In theory, if you reduce the chance of something going wrong in your home, you should be reducing the chances of submitting a claim as well. Therefore, it would only make sense to lower your price of insurance. Installing smart home technology is one way to lower the risk of making claims, especially when water monitoring systems and intrusion alarm systems are set in place. It is when these devices are interconnected with each other and offer the most protection possible, insurers are more inclined to offer premiums or other discounts for their installation.

Today, a lot of insurance companies are beginning to see the opportunity to invest in smart homes starting at a product level. Many of them have created partnerships with companies selling smart home devices, hoping to bring them closer to the consumer while reducing their risk to loss claims. Employing smart technologies in homes is a growing market that impacts the insurance industry largely. The industry itself should begin to think deeper about their engagement with consumer-facing technology, requiring insurers to deploy new strategies to improve customer experiences. Smart home technology can help engagement with customers and give insurers the opportunity to earn loyalty while differentiating themselves from their competitors.

What about other risks of Smart Home Technology & Insurance?

One of the greatest concerns with modern technology are cyber risks, such as hacking. Whether it be on your smart phone or home computer, there is always the risk of having these technologies hacked, so why would it be different for a smart home? Unfortunately, the risks are all the same for smart homes, however insurance companies have noticed these risks and could offer personal cyber protection on your home insurance policy. While it varies from company to company, most companies will offer protection of cyber attacks, cyber extortion, online fraud or a data breach.

Other ways to protect yourself against these risks are to install tools that are password protected, especially when it comes to devices with cameras or microphones. It is recommended that to use different passwords for everything to reduce the risk of hacking into all the devices in your home. These tools are very helpful in day to day life, to protect yourself and your family and overall make your home safer to live in.

Did you know that some insurance companies now offer a smart home insurance discount? Contact us today to see if you could be eligible for a smart home insurance discount. We would love to hear any questions you may have if you are thinking of installing these devices.