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Over the past decade, the concept of a “smart home” has evolved significantly from a fancy buzzword used exclusively by tech enthusiasts to a new norm of life for modern Americans. Initially, consumers invested in various internet-of-things gadgets mostly for the sake of convenience. You could control the lighting in your house with your voice or change the setting of your thermostat with the click of a button from your smartphone. However, as the underlying technology progressed, the focus on smart homes quickly shifted towards security and cost-efficiency. Fortunately, many homeowners are starting to realize the incredible potential of modern home automation. Insurers have noticed this growing trend as well. As they operate strictly on the principles of risk assessment and management, anything that minimizes a client’s chance of filing a substantial claim is valuable for an insurance provider. To entice homeowners to safeguard their assets independently, today’s major providers offer significant premiums discounts to any policyholder who installs verified smart home upgrades. Understanding which devices are of particular interest to your insurance company is crucial when upgrading your living space.
1. Smart Water Leak Detectors and Automatic Shut-Off Valve
One does not need to go too far into detail to discover what causes catastrophic home damage in America. The stereotypical vision of raging house fires, burglaries, and explosions is inaccurate and misleading as the real source of home devastation usually occurs on a mundane and routine level. Plumbing-related disasters caused by failed pipes or water heaters can cost insurers billions of dollars a year. One pin hole leak in the basement, for example, can quietly drain hundreds of gallons of water into your floors and walls while you are away at work or traveling, causing extensive drywall rot, structural issues, and mold infestation.
This problem is effectively solved by installing smart water leak detectors, which notify you about any moisture they detect via a mobile push notification. Although it is already a good start, the gold standard is an automatic shut-off valve on the main water line of your home. When connected to a home automation hub, this sophisticated gadget monitors the water pressure and flow rate of your property. If any sudden abnormal flow is detected, it automatically cranks down on the main shut-off valve, preventing a potentially disastrous flooding before it even starts. As this kind of protection eliminates the risk of a water-related catastrophe, insurance underwriters appreciate it immensely and often apply generous discounts for customers using it.
2. Monitored Smart Security System
Burglar alarms are not new to the American market, and many households have been relying on them for quite some time. Unfortunately, outdated security systems with simple sirens and a wired landline connection are no longer adequate for home automation. On one hand, they are susceptible to cuts and blackouts. On the other, they frequently cause false alarms, which irritate homeowners and local police departments.
A modern smart home surveillance solution solves these issues by combining the benefits of cellular backups, battery redundancies, and a number of complementary gadgets. For example, the typical security setup includes smart contact sensors on doors and windows, a camera-based system for monitoring interiors, high-definition exterior cameras with facial recognition capabilities, and smart video doorbells. Finally, the most crucial part for obtaining an insurance credit is a professional 24/7 monitoring. It ensures that, once your security sensors detect suspicious activity and sound the alarm, a remote security center confirms it and dispatches local law enforcement as soon as you fail to deactivate the threat via your security app. Additionally, professional signage and visible smart cameras deter most opportunistic burglaries and reduce your liability greatly.
3. Smart Smoke Detectors and Carbon Monoxide Sensors
Apart from property destruction, the biggest risk associated with home insurance is the possibility of total loss of your dwelling and personal liability claims. Fires represent one of the biggest threats in that regard, often leading to total home destruction and significant personal injury claims. Traditional smoke detectors are vital safety equipment, as they save your life when present in the vicinity of the developing fire; unfortunately, they become useless when you are absent from the premises. The smoke and heat detectors sound off, but there is nobody to hear it, and your property burns down.
The problem of communication with these devices can be solved via the installation of smart smoke and carbon monoxide detectors. Unlike traditional variants, they broadcast alerts directly to your smartphone whenever they sense dangerous smoke accumulation and high heat indices. At the same time, you receive live feeds from your interior cameras and dispatch an emergency squad. The best models can additionally coordinate with other smart devices. For example, smart fire detectors can immediately turn off the HVAC system fan in case of an emergency, thus cutting the supply of oxygen needed for the fire to spread further in the house. Lastly, the best smart smoke detectors can be incorporated into your home’s security plan and send an emergency signal to a monitoring center, triggering the automatic response from the local fire department. All of these features make smart smoke detectors great candidates for discounts.
4. Smart Climate Monitoring and Smart Thermostats
As mentioned above, smart thermostats are highly sought after because of the ability to learn the homeowner’s schedule and adjust heating and cooling cycles accordingly. While these benefits alone should warrant the acquisition of a smart temperature controller, it is not the only thing you should keep in mind when choosing a home upgrade. In addition to savings, smart climate devices can increase your home’s resilience to natural catastrophes, especially in colder climates, and reduce the risks of property damage and liability claims.
To illustrate the point, let us imagine that you are going out of town during the middle of winter. While enjoying your vacation in the sun, your home’s furnace suffers a mechanical fault, and the interior of your house starts getting dangerously cold. Once the indoor temperature drops below freezing, the water in your plumbing system turns into ice, thus cracking your pipelines open and causing an enormous flood once the outside temperature increases. The easiest way to prevent this disaster is by installing smart thermostats equipped with low temperature alerts. Whenever the temperature becomes dangerously low, your smart thermostat will instantly alert you of the danger, allowing you to send a local technician to check on the house before it suffers any damages.
5. Smart Deadbolts and Keypad Entry Systems
Finally, we come to the core of home protection – the physical entrance points. Physical key-based locking systems are relatively reliable and effective in terms of protecting your belongings and keeping unwanted guests out. They do have one major drawback, however – the key can easily be mislaid, stolen, or even replicated by someone malicious. Some homeowners resort to storing a spare key outdoors, but such actions are extremely unwise as anyone can find your hidden backup and enter the property while you are away. This problem can be efficiently mitigated via smart locks.
These advanced systems allow you to control your home’s physical entrances without having to rely on a physical key. Instead, they employ advanced encryption protocols, fingerprint scanning, and custom PIN code entry. Furthermore, you can create and share temporary virtual access keys that expire on certain dates. Additionally, smart locks log and store information on everyone who unlocks the house using different types of authentication. From the perspective of an insurance underwriter, smart locks are even more interesting because they support automated locking procedures. If you accidentally leave the house unlocked because of the hustle and bustle, your smart lock will automatically activate once it either reaches a set threshold or recognizes the fact that your smartphone leaves the property. Such a function makes smart deadbolts great for preventing “forced entry” burglaries.
How to Maximize Your Insurance Discounts?
Upgrading to a smarter home is half the battle – communicating this upgrade to your insurance company is another step you should not overlook. Since the policies differ from state to state, you might want to consult your local independent agent prior to making a purchase to see if your carrier offers discounts and which specific brands and plans it approves. Once your smart home upgrades are fully installed, you should inform your insurance company about the changes, providing necessary proofs.
Depending on the type of a gadget, the proofs of ownership can take multiple forms. For standalone items like climate sensors, water valves, or smart thermostats, your insurance company might accept purchase receipts, images of installed devices, or screenshots from the control app of your choice. For more comprehensive protection, your monitoring service provides a Certificate of Professional Monitoring, which is the best proof of ownership you can use. Simply upload the document, and you will receive your desired premium discount, which can vary from a minor 2% credit to an astounding 15% or even 20%.
FAQ
Question: Does every insurance provider offer discounts for smart home upgrades?
Despite the fact that most major insurance companies offer some form of discounts or incentives for installing smart home gadgets, each has its unique criteria for qualifying. Some companies even cooperate directly with home automation brands, offering policyholders the opportunity to acquire smart gadgets in exchange for participating in a specialized data-sharing program.
Question: Will smart home gadgets help me prove my case during a dispute?
Definitely. Logs, timestamps, images, and videos provided by smart home devices are invaluable when the insurance provider suspects fraud. For example, video footage recorded by doorbells and sensors can easily establish the exact date and time of burglary, leaks can help estimate the moment when your pipes burst, and so forth.
Question: Am I required to use professional monitoring services to gain a discount?
In most cases, yes, you are. Since insurance providers are always wary of false alarms and human error, they prefer their customers to have professional monitoring centers watching out for any suspicious events rather than relying on self-monitoring. Self-monitoring services have many drawbacks, such as phone batteries dying, bad cellphone reception, or homeowners sleeping deeply at the time of a burglary.
Question: Can my insurance company access my device data?
Generally speaking, insurance providers do not have access to your smart devices’ logs unless you participate in their data-streaming program for bigger discounts. If the dispute regarding your insurance claim arises, however, your insurance company will likely request your logs to determine the timeline of events.
Question: Are smart home discounts available for renters as well?
Yes, smart home upgrades also help renters to minimize insurance costs. Installing devices such as smart doorbells, smart switches, water sensors, and thermostats can help you reduce the price of renting (HO-4) and condo (HO-6) insurance policies significantly.