Asmart homes are those where appliances and other devices can be wirelessly connected so that homeowners have control and access from anywhere. Insurance agencies are becoming more interested in smart technology in their homes. Smart home technology can make homes safer and reduce the chance of being damaged by fires or theft.
Smart home systems can also be used to provide data to insurance companies. This allows them to determine risk and cost for insurance. The system sensors detect water damage and smoke, and alert homeowners via their smartphone. Smart home discounts are an insurance company’s way to encourage homeowners to invest in smart technology.
Different types of smart home insurance discounts
Insurance companies often offer discounts on premiums to encourage customers to take certain actions. However, smart home system users can also be rewarded by providers in other ways. Insurers may offer discounts on the system or even waive the installation fees.
What smart home devices are eligible?
Although every insurance company offers different discounts, these are just a few of the most common smart devices providers that might offer incentives to you for installing them in your home.
- Smart thermostats
- Security systems include smart locks, window and door sensors, video doorbells and smart locks. Most providers won’t offer discounts for individual components such as locks or sensors.
- Amazon Echo Dot
- Interior sprinkler systems that are automatic
- Sensors for shutting off water and gas supply
- Smoke detectors or smart fire alarm systems
What amount will I save?
Insurance companies will vary in the savings that you can receive by installing smart home technology. Most insurance companies offer discounts of between 5% and 20% on homeowners insurance premiums. This depends on how smart your device is and how likely it is to lower your chances of filing a claim. You can stack your savings by obtaining multiple discounts from different insurance companies.
The savings don’t stop there. There are many larger insurance companies that offer lower costs or free activation fees for systems. This can help you save even more. Liberty Mutual has partnered up with Vivint in order to offer $0 activation fees and $100 off select smart-home devices. Amazon teams up with Travelers to offer home insurance customers new products for free.
Smart devices qualify for insurance discounts
Insurance companies are partnering with companies that offer smart home technology as more people become interested. These partnerships could save you money on smart home technology by working with insurance companies.
- Allstate – Allstate is partnered with Canary and offers a 5% discount for homeowners insurance as well as $20 off an annual membership to Canary HD security cameras.
- American Family is AmFam’s partner with Frontpoint Home Security Systems. Frontpoint provides a control panel, security cameras and locks, as well as sensors, for homeowners to install, which saves on installation fees. Frontpoint monitoring plans start at $10 per monthly. American Family customers can buy the basic Frontpoint system starting at $99.95 and receive a 36-month price promise on monitoring services. They also save as much as 5% on their home and auto insurance premiums.
- Amica The Flo by Moen Smart Water Security System monitors the water usage in your home and can shut down water supply if necessary. You can also remotely control your water shutoff. Amica homeowners discounts can vary from one state to the next, but the $800 system is available for policyholders of Amica.
- Hippo is a partnership between SimpliSafe, Notion, and Kangaroo in order to provide free services to policyholders in certain states. Self-monitoring systems offer a 10% discount for homeowners, while professional monitoring systems can save up to 13%.
- State Farm Homeowners in Arizona and California can receive a no-cost Ting if they are insured with State Farm. The home policy does not come with a discount, but State Farm will pay for the hardwire and three year of service. Ting monitors electrical hazards and power quality, and offers State Farm policyholders $1,000 worth of hazard repair credits. This credit can be used to fix hazards by a licensed electrician.
- USAA – USAA customers who partner with ADT home security system can save upto 15% and receive 10% off their monthly monitoring. Plus, a 10% discount on homeowners insurance premiums.
Smart home discounts: pros and cons
Smart home technology is now more affordable than ever thanks to the rebates, incentives, and discounts offered by homeowners insurance companies. Technology comes with a lot of risk. These are the pros and disadvantages of smart home technology.
Pros
- Security enhancement: Smart home devices can be used to deter burglars from entering your home. They will alert you and the authorities in case it does.
- Convenience: Automated systems can be controlled from a smartphone. Homeowners can easily change the thermostat, turn on lights, or alert them to possible hazards.
- Energy savings: Smart home systems can change pre-programmed settings automatically throughout the day. They also monitor water and energy consumption, which makes homeowners more aware of their energy usage and allows them to make changes to save energy. Utility demand response programs are also a way to reduce peak energy consumption.
- Universal apps: Smart home hubs that are Wi-Fi enabled can be controlled using one app. This allows you to turn on lights, lock the doors, set the alarm and change the thermostat.
Cons
- Cost: Although some insurance companies offer rebates and incentives for equipment, homeowners are usually responsible for the cost of monitoring and any other costs associated with smart home systems. For most smart home systems to function properly, homeowners must also have an internet connection.
- Cybersecurity: Hackers can access smart home systems that are connected to the internet. Hackers could gain access to your smart home devices and possibly access private information. Make sure your passwords are complex and that you update the apps as necessary.
- Learning curve: Although some smart home systems can be installed and learned quickly, others are more difficult and might prove to be more difficult for those who aren’t tech-savvy.
- Outages: Some systems have battery backups, while others don’t, so that if the power or internet goes down, it can cause a disruption in functionality. If you live in an area that is prone to strong thunderstorms, outages can be especially problematic.
Are smart home discounts really worth it?
It is best to find out if installing a smart home system or device is worth it. This will allow you to see how much homeowners insurance can be saved with the discount. Next, calculate the cost of the system with rebates and incentives. Consider the cost of monitoring for systems that require monitoring such as burglar alarms and fire alarms. As smart devices become more widespread in the country, insurance companies will continue to offer discounts on smart devices.
It’s worth the investment
- American Family: The discounted basic system and the 36-month price lock for monitoring from FrontPoint might be worth it if you don’t have one.
- Amica: If you do not need one, the savings from the water usage monitoring system might be worth it.
- Hippo: Self-monitored systems come with a 10% discount on homeowners insurance. Professional monitoring offers a 13% discount. Hippo is a security system provider that focuses on smart homes. This means they offer a variety of options to customers and will likely continue to offer more discounts in the future.
- State Farm: Get a free Ting for three consecutive years and a $1,000 credit towards your repairs. This is a great deal, even without a homeowner discount.
It is probably not worth the investment
- Allstate: A $20 annual discount for Canary HD cameras and 5% off homeowners insurance mean that this discount might not be worth it unless you don’t have one.
- USAA: Even with discounts on your home insurance and monitoring, the cost of ADT systems can be quite affordable. You may even be able to purchase a smart security system cheaper.
Consider the benefits and drawbacks of smart home devices when weighing the savings on homeowners insurance. While smart home systems can help protect your home and reduce damages with early alerts, they also come with the potential for cyber-hacking. Additionally, there may be a higher out of pocket cost which could negate the savings you get on homeowners insurance.
