State Farm is notable for offering insurance coverage discounts for policyholders who have monitoring and automated management systems. According to spokesperson Rachael Risinger, smart fire and water monitors and automated light and energy controls help consumers save money and prevent losses — fewer losses to cover goes right to an insurance company’s bottom line.
“Research indicates home control and monitoring products help provide protection to the home,” Risinger said. “State Farm envisions an intelligent home that increases policyholders’ awareness of what happens in their homes and empowers them to control and protect their family and possessions.”
Insurance research company Accenture reports that in 2015 22 percent of home insurance companies were running pilot programs to study connected home devices in home policies.
“There is a significant movement within the insurance industry now to see how they can leverage some of these connected devices to make people more insurable,” said Eric Cernak, Munich Resaid insurance group vice president and cyber practice leader. “Whether through subsidizing devices or providing better terms and conditions on these policies, there are a number of ways various companies are looking at encouraging these technologies.”
There are concerns about connected smart homes. In addition to potential loss of personal data or privacy from smart home devices, Cernak observed that smart monitoring systems data tracking could lead insurance companies to adjust policies accordingly.
“You could get to a point where insurance companies are saying they know you have a security system on your home, but you aren’t turning it on so they won’t give you a discount,” Cernak said. “The convenience that comes with all of these devices also means they are capturing your day-to-day lives behind closed doors, and people forget about the value of that.”
