Latest Trend in Insurance? Subsidizing Your Smart Home

Insurance companies want to pay for your Internet-connected devices, but privacy concerns loom.

Multiple insurance companies have begun enticing customers with discounts in return for wiring their homes with Internet-connected devices.

Devices range from thermostats and moisture sensors, to home security monitors and video doorbells. Liberty Mutual will send customers a free Nest Protect smoke detector, normally worth $99.

The idea behind this new trend is it allows insurers to monitor the condition of your home. For example, in the near future they can call a plumber if they detect your pipes are about to burst.

“In the near future, you’ll give us a mailing address and we will send a box of technology to you,” says Jon-Michael Kowall, assistant vice president of innovation at USAA. “What’s in the box will prevent claims and also offer a better service to policy holders.”

Being able to fix problems before they occur would result in fewer payouts for the insurer, thus enabling them to subsidize more connected devices.

As usual with connected devices, the debate about privacy has risen. Some have expressed concerns about how the data collected from customers could be misused.

Another issue is the threat of ransomware. John Cusano, senior managing director and global head of insurance at Accenture, told MIT Technology Review he expects underwriting to take care of this issue. Insurers would have to pay the ransom if any devices are taken over.

Overall these types of offers can be a boon to an industry and beneficial to everyone. The adoption of smart home devices increases and both insurers and their customers save money in the long run.

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About the Author


Steven A. Karantzoulidis is the Web Editor for Security Sales & Integration. He graduated from the University of Massachusetts Amherst with a degree in Communication and has a background in Film, A/V and Social Media.

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