Smart Home Tech Helps Detect Potential Damage — and Insurance Companies Love That

Parks Associates found that 33% of respondents in a survey of 8,000 U.S. internet households with renters’ or homeowners’ insurance would switch insurance providers in order to get smart home devices.

The report suggests that the Internet of Things technology could be an important enabler. Renters or homeowners could limit or even avoid expensive and disruptive events to their homes and enjoy lower premiums. Insurance companies could pay out less in claims.

It’s important information for broadband providers to know and to share with customers and potential customers. Not only would smart home devices be helpful for the customer; the devices also make the broadband connection more valuable, potentially helping to minimize churn.

The connection can support connectivity to a manned central monitoring station or to a cloud application that sends an alert to the homeowner or other parties.

The research, “Insurance Opportunities in the Smart Home,” points to a collaboration between home security, water and energy management firm Resideo (representing the Honeywell Home brand) and Nationwide, which gives homeowners discounts when they acquire specific device packages. The partnership is slated to begin this year.

Interest is particularly high concerning water damage. Parks says water is by far the most common type of damage. The analysts cite data from the Insurance Information Institute that says the average cost of water damage from leaks and related sources is $9,633 and from floods or weather-related events it is $8,625. Faulty wiring also is a major source of damage that smart home technology can address.

“Insurance is a highly competitive industry, with numerous companies offering similar products,” Parks Associates’ Vice President of research Jennifer Kent said in a press release. “Customers often have multiple options to choose from, making it easier for them to switch to a different insurer. Smart home devices can lure customers from their existing insurance providers and attract customers who are new to the home insurance category.”


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