Smart home devices’ popularity hasn’t convinced insurers

Purchases rising quickly, but are they delivering or making things worse?


By Will Koblensky

Home safety devices that let you check in on your house using your phone are marketed to consumers as adding piece of mind.

After all, you can see the security camera feeds, the smoke detector battery life and the water leak detector fail-safes from wherever you are.

But what the internet enabled gadgets don’t offer consumers (yet) is a significant reduction on their insurance premiums, it seems.

Insurers have pushed back against the argument these devices mean home insurance claims are less likely and therefore premiums should be cheaper.

Insurance Business has reported on similar devices being used in cyber attacks because, though their primary function is to keep homeowners safe, the devices themselves can lack cybersecurity measures and have served as a gateway for hackers.

ABI Research estimates there will be $79 million shipments of smart-home devices sent to homeowners by the end of 2016.

The same organization expects that number to reach $360 million by 2020.

Basic security devices have earned homeowners lower premiums for some years – but now the question is if the online capabilities of these new devices, providing instant updates on their state of repair, warrant further reduced fees.

A handful of insurance companies offer some lowered premiums for smart home devices. However, the average premium for a US household is projected to rise to $1,293 in 2016, that’s up 5.5% from 2015 and a 61% jump compared to 2006, according to the Insurance Information Institute.

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Insurance – why it’s “not about pushing tech for tech’s sake”

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