Smart Home Technology: A Major Insurance Benefit

With the abundance of smart home technology now available to homeowners, particularly for home security systems, you have more options than ever before when it comes to protecting your home. As an added bonus, you could receive a discount or incentive through your home insurance company for installing smart systems.

“Some home insurance companies are offering discounts when homeowners or renters install certain products or systems,” says Katie Tu, an insurance specialist with QuoteWizard by LendingTree LLC. “This is because smart homes can minimize loss of life, mitigate disasters, prevent burglaries and keep the home and property safe and secure.”

Ask About Discounts and Rebates

Potential discounts will depend, of course, on a number of factors including which insurance carrier you use, your geographic location, and what kind of security system you have. Installing a security system connected to an outside monitoring system typically results in larger discounts, according to the New York-based Insurance Information Institute. Beyond that, it doesn’t hurt to ask about other discounts related to smart home security devices or monitors.

“With the new technology out there, such as Ring and so on, carriers are exploring new ways to apply discounts,” says Adam Czerwinski of Sidebar Insurance Solutions Orland Park, IL.

Smart home technologies have become relatively easy to install, and in many cases, are pretty budget-friendly. In addition to security systems, other smart home features you might be considering include:

Smart Locks and Timed Lighting

These are obvious for safety reasons and can be controlled by apps from your phone, so people think you’re home when you’re not. And you get better peace of mind since we’ve all that panic moment of “did I lock the door?!”

Smart Thermostats

These allow you to keep your home at the optimum temperature no matter the season or even the time of day by programming your thermostat settings, which, in turn, helps you to lower your energy bills.

Smart Water and Flood Sensors

These devices detect if you have a water leak from an appliance or plumbing and immediately alert you to the issue, helping you to prevent costly damage.

According to Tu, just because you install a certain technology doesn’t guarantee a discount. “Usually the discounts are available by installing security measures or home-monitoring services. Some insurance carriers will provide incentives to get you started on smart technology, like providing a kit with an Alexa with security devices if you sign a policy with them,” she says.

Tu added that it’s always a good idea to compare various insurance carriers to determine which discounts they provide. She suggested asking the following questions:

• Do you provide any discount on smart home technology? If so, on what devices and how much of a discount?
• Do you offer any incentives for adding smart home technology?
• Do you offer any rebates for purchasing a smart home security system?
• Will I have to share my device data with you?

Receive Smart Tech Directly

Czerwinski concurred that consumers need to be proactive about asking about discounts or other incentives related to smart home technology when shopping for home insurance. Some insurers are even starting to directly provide policyholders with the benefits of smart technology.

Encompass Insurance, part of Allstate’s group of companies, is one of a growing list of carriers partnered with the California-based smart tech company Roost and its Home Telematics Program to provide smart sensor safety kits to policyholders. The kits include a water leak and freeze detector and a smoke alarm smart battery to monitor for leaks, frozen pipes and fires. If a problem is detected, the devices notify homeowners via an app that also connects to the insurer and includes resources for finding local service professionals.

For insurers, the program is aimed at reducing loss exposure. For homeowners, the sensors provide extra peace of mind in protecting their homes and allow them to take action that much quicker if a problem does arise. “In partnership with Roost and the HTP, we are embracing innovative technologies so we can better meet the ever-evolving needs of our customers,” said Sharon Dean, Encompass product vice president in a press release.

“Clients who have used it have liked it,” Czerwinski said of the HTP program. “It provides that peace of mind. You feel more comfortable when you go out. Why wouldn’t you want that in a house you’re building or buying?”

Review Your Policy

It’s also a good idea to review your homeowner’s policy at least annually even if you haven’t made any major changes. But if you are considering adding or have recently added smart home technology to your home, Tu says it’s important to review your policy and update it, if necessary, for the following areas:

Home Improvements

This includes installing smart home technology like security systems and smart thermostats, according to Tu. “You want to ensure that these improvements are covered by your policy and it can also add value to your home. Revising your coverage can help save you from paying extra replacement costs out of pocket, and if it helps reduce the risk of your home, then you could save on your premiums,” she says.

New Smart Home Tech Purchases

Since your policy covers your possessions in addition to the actual dwelling, you should take a home inventory on a regular basis of your possessions and their value to account for major new purchases. “It’s a good idea to contact your insurance agent to let them know if you have purchased a smart home technology system so they are aware and can make sure it’s covered by your insurance,” Tu says.