Why insurers should take note of the rise in DIY security

The DIY mentality has been a powerful force helping transform technology and home projects for years. But what if DIY went a step further and was applied to security, helping homeowners protect their properties, cash in on insurance savings and lower risk for insurers in the process — sounds appealing, right? We’ll let you in on a little secret — this is already happening thanks to DIY smart home solutions.

Their popularity is only trending upwards. Parks Associates reports that residential security adoption increased to 36% of U.S. households as of Q2 2021, primarily driven by DIY security. And according to research from the Z-Wave Alliance, DIY has become the primary installation method for many products with eight of the top 18 smart home products featuring DIY installs. It’s time insurers embrace this growing trend — for their own benefit and for their customers.

Homeowners turn to DIY security

Security solutions themselves are nothing new. But DIY is on the upswing. In fact, Parks Associates found that adoption of DIY security made up for 50% of all security systems sales in the past year, with the firm predicting that DIY security solutions will soon cover a majority of the market.

What’s behind this trend? For homeowners, there are two main drivers. First is the freedom and flexibility that DIY security devices offer. Homeowners can often install devices in minutes with no need to schedule or pay for professional installation. Many devices also afford them the ability to monitor for the specific tasks most important to them — whether that be opening and closing doors, a sounding fire alarm, water leaks in a laundry room or the threat of freezing pipes in a basement.

Second are the potential insurance savings. With premiums increasing every year, homeowners are looking for a way to save anywhere they can. Through smart home partnerships, insurance carriers like Nationwide and Hippo are leveraging smart home technology to offer homeowners an average of 5% savings on their annual premiums in exchange for activating their smart home monitoring devices. And these carriers are often providing smart home devices at a discount or for free. For homeowners, this is viewed as a win-win situation — they get their hands on the DIY monitoring solutions they’re craving for more visibility and control over their properties while also saving money on their insurance premiums in the process.

Insurers embrace DIY

So what’s in it for insurers? For starters, DIY monitoring and security solutions empower homeowners to take matters into their own hands. Traditional security used to be viewed as a way to monitor opening and closing doors and windows with the main goal of catching intruders. Today, security is viewed in much broader terms to include the real risks and associated damaging insurance perils within a home like fire and leaks that can have a major impact on everyday life. By providing access to these DIY devices, insurance carriers are making it possible for homeowners to proactively monitor for these real risks, catching them before they turn into costly repairs, claims, and worst of all the headaches that come with it.

Best of all, DIY security is something homeowners already desire as proven by the data above. This isn’t just a fad or gadget that will fade over time. DIY security will only continue to improve and be used to monitor additional events and use cases as homes become smarter and more connected. Not to mention the customer acquisition, retention and overall return on investment (ROI) insurers are already seeing by utilizing this technology. Most policyholders only interact with their insurer while filing a claim or renewing policies.

Through DIY monitoring and security, insurers can use this technology to engage with customers more often (on a daily basis) and build customer loyalty in the process. Some insurance carriers are experiencing 3x ROI on customer acquisition costs as a result of partnering with smart home technology providers.

The popularity of DIY security isn’t going away and it’s time that insurers take notice to lower risk and offer homeowners the insurance savings and home monitoring they crave from technology already in demand.

Tommy Fad is the vice president and general manager for Notion, a Comcast Company that empowers home and property owners to be proactive in monitoring their spaces and most valued possessions. He most recently served as Comcast’s vice president of multifamily product management and previously co-founded and was CEO of Gritness, a fitness software company acquired by Under Armour.

Opinions expressed here are the author’s own.

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• How home technologies can lower insurance rates
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