Smart Home Technology and Insurance

Ever heard of the Internet of Things (IoT)? If the phrase conjures amusing images of inanimate objects happily chatting away, maybe even updating their profiles or relationship status, you’re not too far off track. But what in the world would a fridge have to say, and why might you need to hear from your sump pump? The reason, of course, is because the IoT allows you to create a smart home full of connected devices that can be operated conveniently (and even remotely). So read on to learn more about what a smart home is, what the benefits are of having one, how to smarten up your own home, and how it affects home insurance—a little or a lot.

What is a smart home?

In its simplest terms, a smart home is a residence that has a series of appliances and systems that are connected to the internet so they can be monitored and/or controlled by a mobile or other networked device. Many smart home systems can even identify or follow routines to allow a regular sequence of actions. Smart home automation devices could turn on lights at dusk, send notification to the authorities if an alarm is activated, trigger a shutoff valve if a water leak is detected, etc.

What are some advantages of a smart home?

1. Convenience. You’ll be able to control all your systems from a single device.
2. Efficiency. A smart home manager can learn the occupants’ schedules and self-adjust.
3. Reduced energy consumption. Remote utility management saves energy and can lower costs.
4. Security. You can get notifications, updates and alerts, even when you’re away.

What are the various components in a smart home?

• Smart home hub: physical device such as a phone, tablet or universal remote that acts as the control point
• Smart home manager: software application with a user interface to control and monitor connected devices
• Sensors and detectors: devices that gather home environment data such as temperature, moisture, motion and glass-breaks
• Voice assistants: supplemental input to the overall smart home system that has the ability to analyze spoken commands and respond appropriately
• Smart home devices and appliances: various components of a system that can be controlled remotely to adjust lights, thermostats, music, etc.

What are some examples of smart home devices?

Thanks to ongoing advances in smart home technology, many devices can be connected to today’s smart home. Here are some of the most popular:

• Doorbell cameras that capture video or allow for live feeds
• Entry locks that can be checked and activated remotely
• Smart TVs that can act as a smart home hub (control point)
• Lights (both interior and exterior) that can be turned on and off
• Garage doors that can be checked and activated remotely
• Smart home security that sends alerts and broadcasts live video
• Robotic vacuums that can be operated remotely
• Smoke and carbon monoxide detectors that send alerts
• Smart thermostats that can be adjusted remotely
• Water leak sensors that send alerts and trigger water shutoff valves

How to make a smart home

Resist the urge to buy or connect everything at once. Start small with your smart home installation so you can learn how to operate it without feeling overwhelmed.

1. Set up a reliable wireless internet connection using a Wi-Fi router.
2. A smart speaker with a built-in virtual assistant (such as Amazon’s Alexa, Google Assistant or Apple’s Siri) makes a good first smart device—it’s relatively inexpensive and easy to operate, and it can connect with other smart home tech.
3. As you choose devices to add to your connected home (smart bulbs, smart plugs, etc.), pay attention to brands and compatibility; not all devices work well together. Some may identify a smart home interoperability standard (such as Matter) that allows devices to interact with or without a cloud connection.
4. Pick the right smart home hub to act as the control point. You may prefer using your phone, but a smart display with a large touchscreen is easier to leave somewhere for everyone to use.
5. Secure your network to protect it from unauthorized access.

TIP: There are currently four smart home platforms: Amazon Alexa, Google Home, Samsung SmartThings and Apple Home.

Proactive home protection

If you’ve equipped your home with a smart home security system or other qualifying smart device, you may be eligible for a smart home insurance discount. That’s because some smart home technologies can help alert you to dangers in your home before significant damage is done. When you can reduce or prevent damage from water, fire, theft and other unexpected events, it lowers the chances you will need to file a claim, and home insurance companies frequently reward this by offering lower premiums. 

Best smart home devices to lower insurance premiums

Here are four types of smart devices (each with a link to a brand-specific example) that work to help secure your home. Installing these could qualify you for a smart home insurance discount, but talk to your insurance agent to find out specifics before purchasing any smart devices.

• Smart water leak detectors (like the Moen Flo). Water damage is one of the costliest of insurance claims.
• Smart video doorbell (like the EZVIZ DB1). Talk with visitors (even when you’re not home) and review motion-activated clips.
• Smart locks for home (like the August Wi-Fi Smart Lock). No need to worry about lost keys, as smart locks open with a keypad, a fingerprint scanner or an app.
• Smart smoke and carbon monoxide detectors (like the Google Nest Protect). Get alerts when you’re away, or have them sent to friends or family.

With so many ways to monitor, operate and automate your home, now is a great time to get started. Just remember—research before buying, and base your decisions on convenience, security and cost savings to determine if a component will be a good fit in your grand vision for the ultimate smart home.