Smart devices are increasingly important in our everyday lives and are found in the workplace, in our homes and everywhere in between. In fact,34.8 million homes in the United States are considered “smart homes” in 2019 and this is projected to continue growing.
Home insurance companiesand utility companies have taken notice of increased smart device usage. Benefits of using these devices include increased safety and decreased energy usage, so many home insurance companies are beginning to offer special discounts, rebates and deals for homeowners who use smart devices.
Table of contents:
- Types of Smart Home Insurance Discounts
- Are Smart Home Discounts Worth Pursuing for Your Home?
- Insurance Companies That Are Partnering With Smart Home Device Makers
- Insurance Companies and Your Data
Types of smart home insurance discounts
There are several ways you can save when using smart devices in your home. The type of offer depends on your insurance company, the type of device you own and where you purchase the device.
Here are a few types of smart home discounts your insurance or utility company may offer:
- Discounts or rebates on smart products: Some insurance companies offer exclusive deals with certain smart device partners for their customers. You can typically find these deals on their website.
- Free or discounted installation: In addition to deals on devices, your company may offer free or discounted installation. Double-check if this is offered for any device or only devices purchased through them.
- Demand response programs: These are voluntary programs that help consumers reduce their energy usage during peak hours. With smart home technology some utility companies have an app that will alert you when peak hours are and allow you to turn off your devices. Other companies let you opt in for them to do this for you. The goal is to reduce overall energy usage when it is in high demand. Participants can expect things like discounts and rebates as rewards. Some companies only offer these discounts if the smart device used is purchased through them, so ask your company how you can qualify.
- Discounts on insurance premiums: Some companies offer discounts if your home is equipped with smart devices. For example,American Family offers up to 5 percent off your policy for having smart devices installed. The requirements vary greatly with each company, so confirm your eligibility with your insurance provider.
The size of your discount or offer also depends on the type of smart device you have and how its features impacts your homes energy usage and overall safety.
Here are a few smart home devices that may come with a special offer from your insurance provider:
- Wireless security systems: These systems vary. You can purchase individual devices that manage certain access points such as doors and windows. They allow you to arm and disarm the system remotely and with cameras throughout the house, you can view check in using your web or mobile device.
- Video doorbells: Smart doorbells can allow you to capture high-quality footage of visitors, see better at night and many other perks. Some systems allow you to answer via two-way audio through the doorbell.
- Smart smoke detectors: These detectors can alert your phone of several things like if they detect smoke or if the battery is low. Some models allow you to silence smoke detectors from your phone if you find it’s a false alarm.
- Water and gas shutoff sensors: Just like other smart tech, you can easily manage smart shutoff sensors from your phone. These sensors can alert your right away of leaks or flooding and allow you to turn off your home’s water or gas supply to prevent damage.
- Thermostats: Smart thermostats allow you to remotely manage your temperature through an app. These may also allow your utility or insurance company to manage the temperature in your home. Some thermostats can sync with other technology in your home and adjust to any surrounding safety risks. For example, if the smoke alarm goes off, the thermostat will turn the fan off since air blowing into a fire could make it bigger.
You should double-check with your insurance company and utility company to see what they offer for smart homes. Some offers may only available for certain service areas and others may have specific requirements. You can check this information by going to your provider’s website or directly calling them to learn more.
Are smart home discounts worth pursuing for your home?
Smart home discounts are worth pursuing if your interested in acquiring smart devices for your home and can’t otherwise afford it, already use smart devices in your home, want to reduce your ecological footprint or want to find ways to save overall on home expenses.
For example, Pacific Gas and Electric (PG&E) offers $50 rebates for smart thermostats. As mentioned earlier, American Familyoffers a smart home discount up to 5 percent, For some, this discount may not make a significant difference in their overall household budget, but it is savings nonetheless.
Benefits of Utilizing Smart Home Discounts
There are many benefits that go beyond financial savings, like reduced energy usage and easier home safety management, that make these discounts well worth pursuing.
Here are a few benefits of smart home devices:
- Increased convenience: Managing your devices can happen anywhere.
- Streamlined safety management: You can manage many things straight from your phone instead of needing to call separate companies.
- Quicker response times: Instead of running home to turn off your water to prevent flooding, you can turn it off right from your phone.
- Save money on otherwise pricey devices: Rebates and discounts are helpful for those who otherwise can’t afford smart devices.
- Reduce unnecessary usage: The functionalities of smart devices can help reduce energy usage, in turn reducing your bills and saving you money in the long run.
Disadvantages of utilizing smart home discounts
As great as home devices are, there are some disadvantages that come with them. These price breaks might not be beneficial in the end if it doesn’t help you or your household. Be sure to weigh the pros and cons to smart home devices when deciding if they’re right for you.
Here are a few disadvantages of using smart home devices:
- Overall savings may be small: Homeowners may not save big when switching to smart devices. Discounts are also typically dependent on factors like conditions of the house and location.
- Learning curve for less tech-savvy residents: Less tech-savvy customers can miss out completely on these benefits if they have a difficult time learning how to use these devices.
- May fail to work when the internet is down: Most devices and features are useless when your home’s internet is down.
- Decreased privacy: Insurance companies can have a much more intimate look into your everyday life thanks to the data collected by these smart devices.
- Increased cybersecurity risk: Just like your laptop and your phone, a hacker could take over your smart thermostat and your smart home assistant if you’re not careful.
It’s up to you to decide if smart home devices will ultimately benefit your household. Explore your options and take time to understand how these devices can impact your home and everyone living in it.
Insurance companies that are partnering with smart home device makers
Smart home device makers and insurance companies are partnering to encourage the use of smart home devices in customer homes.
Below, we’ve highlighted a few partnerships with popular home insurance companies.
|Amazon||Farmers Insurance Alexa Skill||Users can get information about claims and their policy.
This Skill does link to your account and requires a login.
Amica Mutual also has an Alexa Skill that helps policyholders get answers for their insurance-related queries.
|Amazon||Amica Mutual Alexa Skill||Users can find answers to insurance questions.
This Skill does not link to your account and does not require a login.
Allstate also partners with smart security system Canary to offer up to 5 percent savings on you homeowner’s policy when using Canary in your home. You should call your Allstate Agent and ask about the “Self-monitored Theft Protection Discount” to learn more.
|Amazon||Allstate Insurance Skill for Alexa||Users can find their nearest agent, get information about their policy, pay bills and more.
This Skill does not require you to login to your Allstate account, but some features are only accessible when logged in.
|Canary||Homeowners Insurance Discount||Allstate customers can save up to 5 percent on their policy when they use Canary products in their home.|
State Farm partners with ADT to offer free equipment and activation for all systems. State Farm customers can also save $60 a year if they purchase an annual plan.
State Farm also partnered with Canary in 2015 to donate home security devices to first responders nominated by their community. Today, State Farm still offers a discount on homeowner’s insurance premiums for customers who use Canary. Customers can call their State Farm agent and ask for the “Local Burglar Alarm” discount that is part of the “Home Alert Protection Discount.”
|ADT||Equipment and Activation Deals||State Farm customers are eligible for $0 charge for equipment and free activation for all systems.|
|ADT||Exclusive Discounts on Plans||State Farm customers can save more than $60 a year when purchasing an annual plan.|
|Canary||Homeowner’s Insurance Discount||State Farm customers can save on their homeowner’s insurance premiums when they use Canary products in their home.|
Travelers offers discounts for having smart or connected home technology. You can also save up to 5 percent off if your home is a certified “green home” by the Leadership Energy and Environmental Design (LEED) organization. Smart home devices can indirectly help you achieve this by monitoring things like energy, water and gas usage.
Travelers partnered with Amazon to giveaway a free Amazon Echo Dots to eligible home insurance customers. This offer is set to expire at the end of 2019, but Travelers has extended this deadline in the past. They also offer two Alexa Skills for customers and Amazon Alexa users.
|Amazon||Free Amazon Echo Dots||Eligible Travelers customers can receive a free Amazon Echo Dot.|
|Amazon||Travelers Home Central Skill for Alexa||Allows users to access tips for things like maintenance, safety and their appliances.
This Skill does not link to your account and does not require a login.
|Amazon||Travelers Skills for Alexa||Travelers customers can manage their policy, pay bills and more.
This Skill does link to your account and requires a login.
They participate in Nest’s Safety Rewards program that offers customers the opportunity to get discounts for their home insurance and discounts for Nest Protect.
Liberty Mutual also partners with Piper to offer a 5 percent discount on home, condo or renters insurance and up to 15 percent off the theft portion of your premium.
They also partner with Vivint to offer free activation and professional installation for their smart home system. This is only available to new Vivint customers.
|Nest||Safety Rewards Program||Liberty Mutual customers can get savings on their home insurance for having Nest products and discounts for Nest Protect.|
|Piper||Homeowners, Condo or Renters Insurance Discount||Piper customers can save five percent on home, condo or renter’s insurance if they switch to Liberty Mutual.|
|Vivint||Smart Home Discounts||Liberty Mutual customers can sign up for Smart Home Discounts for up to 15 percent off the theft portion of your premium.|
Insurance companies and your data
Data is king for many industries and it’s no different for home insurance companies. Having the inner workings of a home recorded and monitored gives insurance companies insight to prevent and protect homeowners.
For example, a smart device that detects a pipe that can potentially burst can alert insurers to call a plumber and shut off the water before any damage happens. Devices can lower other risks like:
- Burglary and home invasion
- Fire and related damage
- Water and gas leaks
Lower risk, heightened safety and predictive technology can decrease the amount of claims filed, thus saving everyone time and money. Some devices can help settle claims faster by using the data they collect. The savings gives insurers more room to offer rebates and discounts for smart home technology.
However, this use of data can backfire if the proper protection and security mechanisms are not put in place. Although certain opportunities for physical risks are reduced with smart devices, opportunities for cyber risks and other physical risks are opened.
Here are a few privacy and safety-related risks you take when you add smart devices to your home:
- Unknowingly create new opportunities for criminals: If you can access your WiFi-enabled security cameras through your phone, so can a hacker if you’re not careful. The consequences unfortunately go further than an invasion of privacy. For example, some burglars can learn your daily routine to get the ideal time to break in just by stealing data from your smart devices.
- Unintentionally giving insurers an intimate view: Your insurers can begin using this influx of information to closely monitor your activity at your unintentional disadvantage. For example, technology reporter Karl Paul suggests insurers in the future could begin penalizing you for risky behavior like leaving the stove on or even tracking when you do and do not use your smart devices.
- Unclear responsibilities of data security: Collecting an increased amount of data inevitably invites hackers to try and steal it. It’s sometimes unclear who is responsible for the damages when data is compromised since smart home devices are still fairly new. This ambiguity can create new headaches, costs and sources of time loss if not clearly established.
Smart devices are great for monitoring your home’s energy usage, reducing your ecological footprint and for saving money. It’s worth checking to see if you qualify for any discounts right now so you can start saving now.
If you’re considering making other improvements to your home, you can take a look at our list of best home improvement loans to see what offers are out there for the projects you have in mind.