It used to be that a sturdy deadbolt was the best you could hope for in terms of home security. But technology is always advancing, and eventually, the first burglar alarms and security cameras began to emerge. These days, home technology is exponentially more sophisticated, not only in terms of security systems but in overall smart home technology. Thanks to the Internet of Things, your home can now perform all sorts of tasks automatically, or via remote control through your smartphone. But can these emerging technological marvels also affect your home insurance rates? In this article, we’ll examine some common smart home features and talk about how they could change what you pay for home insurance.
Understanding Smart Homes
First, let’s talk a little about what a smart home actually is. A smart home is an outgrowth of the Internet of Things (IoT), a shorthand phrase for a home that’s equipped with various internet-capable devices that help automate and control various functions such as lights, temperature, door locks, and more — usually controlled via a smartphone app or central hub. The goal of a smart home is not only to increase convenience, but also to save money on energy bills and to increase home security.
Some common smart home features include:
Motion sensors, which detect movement within a designated area on the property and can trigger specific responses, such as turning on lights, setting off alarms, or sending alerts.
Cameras, such as Ring devices, can provide real-time video surveillance and can even be monitored remotely, such as through a smartphone app, when the owner is out.
Smart Door Locks, which can supplement or replace traditional locks. These devices can enable homeowners to lock or unlock doors using their smartphones, or provide temporary access codes for guests.
Water Leak Detection devices can detect leaks before they start becoming a serious problem and possibly cause expensive water damage.
Smart electrical plugs, which can monitor your electrical system to minimize the chance of an electrical fire or other mishap.
How Smart Homes Can Lower Home Insurance Rates
So can having smart home devices bring down your home insurance premiums? Under certain circumstances, yes, depending on the technology.
For one thing, increased security against burglary will often result in a discount from your insurer. Security cameras linked to a smartphone, for instance, can be a major deterrent against burglars, as can automatic lights and motion sensors.
But safeguards against damage can also be a boon to insurance companies (and by extension, your insurance rates). Water leak detection is a good example of this, although devices that monitor smoke and carbon monoxide emissions can also result in a discount (not to mention the added security to life and limb).
Why do these devices often result in a discount? Simple: because they reduce risk. Anything that reduces the risk of burglary, damage or other claim-causing incidents is good news for an insurance company, and they’re likely to offer lower premiums as a result.
Some insurance companies that commonly offer discounts for smart home tech include:
Allstate, which offers a 5% home insurance discount when policyholders purchase a Canary smart home security system;
State Farm, which frequently provides discounts for policyholders with home security systems, especially those integrated with smart home tech; and
Progressive, which offers select discounts for smart home security devices.
Are Smart Homes Worth It?
While smart home tech has a lot of obvious benefits, it definitely doesn’t come cheap, and you may be concerned about whether the insurance savings will cover the cost. There are also privacy concerns regarding smart home technology. In terms of finances, whether or not smart home technology is “worth it” largely depends on your budget, which insurance company you choose, and the non-financial benefits of having the technology in the first place. Not every insurance company will offer the same sort of discounts, and if you’re hoping the savings in premiums will entirely offset the cost of the technology, you may come away disappointed.
Going Further to Lower Your Home Insurance Premiums
Smart home technology can be a major boon to your home, but it can also be expensive. It can’t hurt to look into other ways of reducing your insurance premiums. One of the most time-trusted ways to find lower rates is to shop around and compare. There are a number of free online tools designed to help you do exactly that — The Zebra’s Kristine Lee has even put together a handy guide to comparing home insurance quotes side-by-side to try to find the best rate.
You can also bring your premiums down by weather-proofing your home with additions like storm doors and windows. Some insurers will give discounts for sustainable or green materials. In general, don’t be afraid to ask about discount opportunities!
