Will IoT devices help reduce home insurance claims?

Will IoT devices help reduce home insurance claims? | Insurance Business Canada

Will IoT devices help reduce home insurance claims?
Water damage is one of the greatest threats to households across North America. It has more of an impact than fire and theft combined, and yet the vast majority of homes are not equipped to mitigate or prevent the damages that could occur.

In the US alone, homeowners file more than 14,000 water damage claims per day, averaging between $6,000 and $15,000 each and totaling up to $123 million in preventable damages daily across the country. The story’s no different in Canada.

However, that could all be about to change thanks to the Internet of Things (IoT), which has entered our homes in many exciting ways. Countless gadgets provide creature comforts – such as controlling the lights and the TV – but there are also simple and cost-effective products that solve real issues around the home and help to mitigate costly homeowner claims.

Chicago-based Elexa Consumer Products, which designs and manufactures electrical components, has officially launched Guardian – a fully autonomous water damage prevention solution with a double leak detection system.

Guardian prevents water damage in the home and even shuts off water in the event of an earthquake with built-in vibration sensors. Connected via the Guardian iOS and Android app, users can check the status of leak detectors, switch the valve controller on and off and check the temperature, ensuring around the clock visibility even outside the home.

“There’s nobody that IoT and home connected sensor devices matter more to than people in the insurance industry, because they grant peace of mind for the homeowners, and help to prevent costly damage claims,” said James Jackson, EVP of Elexa.

“I firmly believe that if you look at the [14,000 non-natural disaster water damage] daily claims in the US, many of them could have been prevented with the help of a connected sensor device like Guardian. We hope to get to a point where homeowners don’t even need to file a water damage claim because the controlled damage costs less than the insurance deductible.” 

Elexa has been in conversation with a number of large insurers about the benefits of the Guardian Water Leak Protector system. Many are said to be interested in subsidizing the product and using it to incentivize homeowners.

It will be made available at a reduced price to participants in a homeowners’ insurance pilot program with Berkshire Hathaway GUARD insurance companies. Through the pilot program, homeowners’ insurance policyholders will also receive a premium discount from the insurance company when the system is properly installed and monitored.

“We are seeing a lot of really interesting solutions in the [connected solutions] market at the moment,” Jackson told Insurance Business. “It has really taken off on the creature comforts side of things, bringing lots of cool, fun and techy gadgets to the house.

“I think the next wave will be towards products that drive down costs [electricity and gas etc.] and make the home more efficient by conserving energy. This next phase could create a more sustainable market and create more opportunities for partnerships with energy companies and insurers.”  


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