How home technologies can lower insurance rates
While devices with cameras are more popular, there are better tools that offer better protection and deeper discounts.
Whether it is a doorbell with a camera or a water valve with sensors and an automatic shutoff, homeowners that are embracing technologies are finding their way to lower insurance premiums to cover their homes, according to Angi Orbann, property, personal insurance product manager at Travelers.
However, not every device is created equally, she says, explaining that while devices that feature cameras are more popular, technology that features sensors for fire and water, as well as devices connected to third-party monitoring services, offer deeper discounts.
“If you think about Ring, it sends alerts to the homeowner, or the user, which is great. The difference when you go to an ADT or other centrally monitored device, typically those not only alert the user but also a third-party vendor that can take action on their behalf. Even if the homeowner is on vacation or not near their phone, there is still action being taken.”
Additionally, products like Ring can be great for hindering theft. However, theft losses are relatively small for the insurance industry, particularly when compared to things such as water damage losses, which technology is also addressing. This is also why leveraging devices with water sensors and automatic shutoff valves, for example, results in bigger rate reductions.
Since devices with cameras serve as a source for entertainment as well as a safety tool, they tend to be more popular. As noted, devices that monitor for things like smoke, fire and water can lead to bigger discounts. However, since devices with cameras are more popular due to the entertainment factor, the insurance industry has some work to do to increase the adoption of more effective tools.
“People are aware of theft and fire, but the typical homeowner doesn’t think about water loss until they have one,” Orbann says. “Those that had a water loss are more aware of it. Even going away to work for the day, there can be significant losses if something happens with plumbing.”
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