The majority of homeowners are deploying smart home devices
While consumers have embraced smart home tech, many don’t realize these tools can lower insurance rates.
Although homeowners have embraced smart home technology, with 66% owning at least one of these devices, many don’t realize that these tools can also lower insurance premiums, according to a survey by Nationwide.
Reducing anxiety and making their dwellings more energy efficient were the primary drivers of smart home device sales, according to the insurance company. Video doorbells, home security cameras and thermostats were the most common devices deployed.
Overall, the usage of smart home products is anticipated to grow 25% during the coming five years, Nationwide reported.
The price of smart home technology was the biggest reason homeowners have yet to install a device, followed by a lack of knowledge and security concerns, respectively. While the cost might be keeping some on the fence, nearly 65% of consumers said they would be interested in these devices if they helped lower premiums, according to Nationwide.
The number one cause of avoidable claims for home policyholders are water-loss incidents not related to a weather event, according to Beth Riczko, president of personal lines at Nationwide, who notes most of these claims are caused by pipe, fixture or water heater leaks.
While smart sensors that monitor for water leaks have the most potential to reduce homeowners’ risks, just 7% of survey respondents are using such technology. Further, only 27% said they were aware of products that monitor for water flow and leaks, while less than a quarter reported being aware of devices that can close water valves in the case of a leak.
“With the Insurance Information Institute reporting the average water damage and freezing event causes more than $11,000 in damage, homeowners should consider these types of sensors to provide an extra layer of protection,” Riczko said in a release.
Another part of the issue is the fact that homeowners have a high awareness of theft and fire but typically don’t consider water damage risks until they have a loss, according to Angi Orbann, property, personal insurance product manager at Travelers.
On top of this, devices that leverage cameras offer a form of entertainment for homeowners. This further increases the popularity of products such as Ring, even though technology monitoring for water leaks offers deeper premium discounts, according to Orbann.
Related: