Despite the claims device makers have made about improved security, insurers aren’t lowering bills.
The smart home device market has led to millions of dollars in sales but has not managed to impress the homeowners insurance industry. Americans have been buying WiFi connected smoke detectors and security cameras in droves. However, home insurance companies aren’t yet convinced that they are worthy of premiums discounts.
A traditional smoke detector may bring savings to many homeowners, but more recent gadgets are still unproven.
With the average rates across the homeowners insurance industry on the rise, some consumers feel that prevention may help save them money. They have been buying a range of smart and connected devices to help keep their homes safer. However, this doesn’t seem to be improving their ability to save on insurance premiums. The companies selling the gadgets promise that they will help to prevent damage and losses.
However, the home insurance industry has pointed out that there is little data to suggest that the devices actually reduce the frequency or size of insurance claims. As a result, homeowners with these devices are paying just as much for coverage as those without the pricy gadgets.
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That said, if the devices are effective, the homeowners insurance industry stands to lose billions.
Should the smart home devices provide the type of improvements in safety and security they claim over time, it could slash into insurance company profits. As home safety continues to improve over time, insurers may lose more in revenue than they end up saving in the reduced claims payouts.
Consumers say they like the connected home security devices because they feel safer. Many have said they feel insurance companies should encourage property owners to invest in those devices.
However, the homeowners insurance industry says the gadgets are too new to know whether or not they are truly effective in any meaningful way. As a whole, insurers are standing firm against lowering premiums for people with smart thermostats, lights, cameras and other similar connected devices. That said, traditional smoke detectors and security systems continue to bring about premiums discounts for policyholders who have installed them.