Smart Home Devices May Help You Save Money On Home Insurance

A smart thermostat can raise the temperature in your house before you get out of bed. With a voice command, a smart speaker can play your favorite podcasts. From across the room, a smart lightbulb may be switched on or off.

However, smart-home gadgets aren't merely for convenience. Some of them may qualify you for a discount on your homeowner's insurance since they may assist keep your house safe and secure.

Smart Home Gadget Discounts

NerdWallet contacted a dozen insurance providers and discovered that the majority of them provide discounts to homeowners who have smart-home devices that prevent water damage, fire, or theft. We discovered firms promoting homes insurance reductions of up to 13%, depending on the device and where you reside, during our study.

Water leak sensors, security cameras, and smoke detectors were the smart devices most typically eligible for discounts among the firms we studied. However, insurers such as Farmers and Lemonade provide discounts for smart locks, and Amica and Farmers provide discounts for motion sensors.

Whether you already have a smart-home device, check with your carrier to see if you qualify for a discount.

Some insurance companies have joined with smart-home technology businesses to make the devices more inexpensive — or even free. State Farm policyholders in most areas, for example, may sign up for three years of free Ting service. Ting offers a plug-in that monitors your house for electrical issues that might lead to a fire.

Hippo, a home insurance company, provides free smart home-monitoring equipment from partners such as Kangaroo and SimpliSafe to policyholders in qualified areas. If the insured installs and maintains the devices, they can save up to 13% on their home insurance.

Amica policyholders may save money on certain smart-home devices from Moen, Guardian, or Kangaroo, while Nationwide offers nearly 50% off Notion smart sensors. These savings are in addition to the home insurance discounts you would receive after installing the devices.

Why Do Insurance Firms Like Smart Home Devices?

Insurance companies provide discounts for smart-home devices because the technology may help detect issues early, thereby avoiding costly claims.

Assume you have a smart water sensor next to your water heater, and the device leaks. The gadget may emit an audible alarm and transmit an alert to your phone, allowing you to respond quickly. (Some gadgets even include a function that turns off the water automatically.)

According to Brett Sobol, senior development initiatives lead at Hippo, without the sensor, you may end up making a claim, paying a large deductible, and having professionals in your basement cleaning up the damage. However, with the sensor, the damage may be so little that you won't need to file a claim at all.

"The finest experience is one in which there is no claim," Sobol explains.

Should You Invest In Smart Home Devices?

The expense of smart-home devices may soon pile up. Consider your home's particular dangers if you want to invest in a protection device but aren't sure whether ones are worth the money, says Karen Collins, assistant vice president of personal lines at the American Property Casualty Insurance Association.

Water sensors, for example, may be worthwhile to purchase if your home has older plumbing, according to Collins. However, if you live in a high-crime area, your money could be better spent on a home security system.

According to Sobol, water sensors are a solid bet for many households. According to Sobol, "water damage is by far the most prevalent claim" that smart-home devices may assist prevent. Installing sensors in bathrooms, basements, and beneath appliances "may [prevent] modest claims from becoming large claims."

Inquire with your insurer about whether the gadgets you're considering are eligible for a home insurance discount. They may pay for themselves within a few years, depending on the size of the discount and the cost of the gadgets.

Remember that the advantages of smart-home technology may extend beyond insurance savings. "Investing in smart-home technology may provide clients with peace of mind, knowing that their house is better safeguarded," Sobol adds.