Smart home technology is revolutionizing the way homeowners manage their household appliances. Whether it’s dimming the lights, locking the doors or turning down the central heating, smart home tech enables users to control various devices when they’re out and about via applications available on smartphones and tablets. As well as giving users an unprecedented level of control, smart home applications also increase environmental efficiency and cut energy costs.
But while these devices are making life easier and more convenient, they’re also putting users at risk. Smart home technology is becoming a growing target for cybercriminals who are hacking into systems in an attempt to gain users’ personal information or disable alarm systems in preparation for a burglary.
Equipped with hacking software known as remote administration tools (RAT), cybercriminals now have the potential to access home equipment connected to a smart tech app, including smart thermometers with cameras, allowing the hacker to spy on a family or property. Worryingly, another device that can be compromised is baby monitors, which one strange individual hacked into in order to scream obscenities at children.
In the hacker community, many of these devices are seen as an easy target. To illustrate the point, at an MIT hackathon for smart homes, would-be cybercriminals were able to gain control of more than one quarter of all devices within three hours.
As more Americans adopt smart technology, insurance companies are being forced to incorporate this new set of risks into their homeowner policies. But there’s more work to do. Major players like Apple, Amazon and Google are now investing huge amounts of time and money in the smart home space and in order to provide adequate coverage, personal lines carriers should be opening conversations with these companies to help them improve their underwriting and provide better insurance products.
This is a problem that is only going to grow and the insurance industry has a responsibility to step up. For brokers, the issues around smart home technology create some good opportunities. In asking their homeowner clients if they’re using smart technology, advising them of the dangers and then guiding them towards the right policies, brokers have the chance to become known as industry leaders who have their finger on the pulse. Not only will these conversations help brokers grow their business, they’ll also help them become known as being conscientious and compassionate and having their clients’ best interests at heart.
