Smart Home Devices Can Cut Insurance Premiums – InsuranceNewsNet – Insurance News Net
The smart home devices that homeowners are installing in their homes for security or to keep an eye on their pets may do more than provide peace of mind: They can cut your insurance rates.
Smart home devices may be able to cut premiums by 10% to 15%, said Pat Howard, senior editor at Policygenius, who also is an insurance agent. That could mean a savings of $100 or more a year for many homeowners, partially offsetting the cost of the devices.
“Protected devices make your home safer,” he said. “Insurance companies will offer credits and discounts.”
There is no hard-and-fast rule on how much a homeowner can save. It depends on an assortment of factors such as the insurance company, the types of devices the homeowner is using, current credits and discounts the homeowner is current getting, and the state where the policyholder lives. Not all companies offer discounts and not all devices are eligible for discounts.
“They’re not widespread, but they are becoming more and more common,” he said of the smart home discounts.
Columbus-based Nationwide, for example, has a policy that can offer up to a 10% discount that is applied to home, water and theft perils in most states. Policyholders also can get a 50% discount off of some kits from Notion, which makes smart home monitoring systems that homeowners can install.
Insurers recognize there is value in teaming up with companies that make these devices that can prevent losses, said Sarah Jacobs, Nationwide’s vice president of personal lines product development.
“If we can save money on claims, we can pass that along to consumers,” she said.
Nearly two-third of homeowners own at least one smart home device, but many don’t realize that the devices can cut their insurance premiums, according to a Nationwide survey of 1,500 homeowners last August.
A 2020 survey by Policygenius, an online insurance marketplace, found that 40.4% of homeowners didn’t realize that installing a security system in their home could cut their premiums.
Video doorbells, home security cameras and smart thermostats are the most popular items, the Nationwide survey showed. Other devices monitor water leaks, smoke and carbon dioxide alarms, and doors and windows.
Nationwide partnered with Notion in 2020 to offer technology that homeowners can use to do such things as watch the home for open doors and windows, smoke and carbon dioxide alarms, and water leaks with a cellphone.
State Farm, the state’s largest homeowner insurer, says it provides for fire, smoke or burglar alarms or any other home monitoring system. It does not offer discounts for water leak detection system.
Smart home devices
can catch water leaks
While customers are aware of video doorbells and other home security devices, there’s not as much focus on devices that can prevent what is among the costliest of insurance claims: water leaks.
The Nationwide survey found only 7% of homeowners use smart sensors that monitor for water leaks. Just 27% say they know about sensors that monitor water flow and leaks, and 24% are aware of sensors that can shut off the water in case of leaks.
Water is the third-leading cause of homeowner insurance claims, with an average of $11,098 per claim, according to the Insurance Information Institute, an industry group.
Nationwide says the water sensors can reduce premiums by 4%, a savings of $50 to $55 per year for many policyholders, Jacobs said.
“People think security is the most important,” Jacobs said. “From a claims perspective, it is …….