Can I get a discount on my homeowners insurance for using a smart home device?

Did you know that 2 out of 3 homeowners insurance customers in the United States would be willing to change insurance companies if they could get a discount on their policy for using smart home devices?

According to data released by NTT Data, which is a top 10 global business and IT service provider, roughly 2 out of 3 homeowners insurance customers in the United States would be willing to change insurance companies if they could get a discount on their policy for using smart home devices.

Smart home devices, which fall under the Internet of Things (IoT) umbrella, include devices such as smart thermostats like Nest, connected smoke and carbon monoxide detectors, monitored security systems as well as smart garage door openers. These types of devices not only make users lives easier but also notify emergency services such as the fire department if a fire breaks out when a homeowner is not at home. This usually means the fire is contained quickly leading to less expensive claims for insurance companies.

The study found that 64% of survey respondents were willing to invest in smart home technology if their homeowners insurance company offered a discount. The study also found that these customers who are referred to as “seekers” in the study, were less loyal to their current insurance carrier than respondents who were not willing to invest in smart home technology.

It turns out that many customers would be happy to purchase homeowners insurance from a technology company, instead of an insurance provider. A whopping 53% of the “seekers” group would trust a non-traditional provider such as Google or Apple for their insurance coverage.

Privacy is a Concern

There are three major reasons that consumers “seekers” are willing to spend money on smart home devices:

• Safety: These devices help consumers feel safe by allowing them to monitor their homes remotely via smartphone apps. Connected devices also alert the authorities in the event of a fire or other incident, allowing them to respond quickly.

• Security: Monitored security systems dispatch the police when they detect an authorized entry as well as allowing homeowners to summon the police via a panic button if an intruder in their home. Security cameras, such as the Nest Camera, allow homeowners to monitor their homes remotely via an app, increasing their sense of security.

• Cost Savings: Smart devices allow homeowners to turn down the thermostat when they are away and have the device warm the house up again before they arrive at home. Lights can also be controlled remotely, resulting in cost savings on utility bills.

Despite the cost savings, the study found that roughly 80% of US consumers are concerned about the security of their information and 73% are concerned about privacy when it comes to sharing data from smart home devices.

The study also found that discounts manage to alleviate some concerns that consumers have over privacy and security. When insurance companies offer a discount on policy premiums, customers are more willing to share the information collected from smart home devices. Not all data is created equal though, the study found homeowners comfort level with data sharing depends on how personal the data is and from which device the data is coming.

Here is a rundown of which devices “seekers” feel comfortable sharing data:

• 47% from thermostats
• 41% from security systems
• 59% from CO monitors

Comfort levels drop dramatically when security cameras are involved with only 24 percent being comfortable sharing this type of data.

Insurance Companies are Taking Notice

Insurance companies have started to take notice and have been working hard to leverage smart home products and use that data to improve their product offerings. The study found that 77 percent of insurance carriers are adding and updating their Internet of Things (IoT) initiatives.

Additionally, 59 percent of insurance companies claim they have made “strong progress leveraging smart home technology to improve products.”

The Internet of Things (IoT) could end up being an industry disruptor according to the study. Competitors that the report believes could end up being major players when it comes to smart home technology include:

72% – Major technology firms such as Google, Apple and Samsung

50% – Home appliance manufacturers

36% – Telecommunication firms

19% – Utilities/cable

Ask Your Insurer for a Discount

If you currently have smart home devices installed in your home, contact your insurer and ask for a policy discount. Depending on the type and number of devices you have installed, your insurer should be willing to offer a discount, especially for monitored security systems.

If your current insurer doesn’t offer a discount for smart devices, we recommend shopping your home insurance now, easily compare up to 12 rates and coverage options. Get Home Insurance Quotes & Apply All Discounts Today!