Sarah Schlichter of NerdWallet
A smart thermostat can boost the heat in your home before you get out of bed. A smart speaker can play your favorite podcasts with a voice command. A smart light bulb can be turned on or off on the other side of the room.
But smart home devices are not just about convenience. Because some of them can help keep your home safe, they can also earn you a discount on home insurance.
DISCOUNTS ON THE RENTAL HOUSE
NerdWallet has contacted a dozen insurance companies and found that most of them offer discounts to homeowners with smart home devices designed to prevent water damage, fire or theft. In our study, we found companies that advertise discounts on homeowners insurance up to 13%, depending on device and location.
Among the companies we surveyed, the smart devices that most often enjoyed discounts were water leak sensors, security cameras and smoke detectors. However, insurers such as Farmers and Lemonade also offer savings on smart locks, while Amica and Farmers give discounts on motion sensors.
If you already have a device for a smart home, ask your operator if you are eligible for a discount.
Some insurers are working with smart home technology companies to make devices more affordable – or even provide them for free. For example, state farm insurers in most states can sign up for three years of free Ting service. Ting provides a plugin that monitors your home for electricity problems that can cause a fire.
Hippo, a homeowners insurance startup, provides policyholders in the states with free smart home monitoring kits from partners such as Kangaroo and SimpliSafe. As long as the insurer installs the devices and keeps them active, he can save up to 13% on home insurance.
Amica insurers can save when buying individual smart home devices from Moen, Guardian or Kangaroo, while Nationwide offers a nearly 50% discount on the purchase of smart Notion sensors. These savings are in addition to homeowners ’insurance discounts that companies will give you after installing the devices.
WHY INSURANCE COMPANIES reward smart home devices
Insurance companies offer discounts on smart home devices because technology can help detect problems in a timely manner, potentially preventing expensive claims.
Let’s say you have a smart water sensor next to the water heater, and the appliance is leaking. The device may beep and send an alert to your phone, allowing you to take immediate action. (Some devices even have an automatic water shut-off feature.)
Without a sensor, you can file a claim by paying a large deductible, and contractors in your basement are removing the damage, says Bret Sobal, head of the growth initiative at Hippo. But with sensor damage can be so limited that you won’t need to make a claim at all.
“The best experience is one where there are no claims,” says Sobal.
IS IT IMPORTANT TO BUY SMART DEVICES?
The cost of smart home technology can increase rapidly. If you want to invest in a security device, but do not know which ones are worth the money, consider the unique risks of your home, – says Karen Collins, Assistant to the Vice President for Personal Affairs of the American Property Insurance Association.
For example, if your home has old plumbing, water sensors may be worth buying, Collins says. But if you live in an area with a high crime rate, your money is best spent on a home security system.
For many homeowners, water sensors, according to Sobal, are a good bet. “Water damage is the most common claim,” Sobal says. The placement of sensors in bathrooms, basements and under household appliances “can (withstand) small claims from turning into large ones.”
Ask your insurer if the devices you are considering will be eligible for a home insurance discount. Depending on the amount of the discount and the cost of the devices they can pay off in a few years.
Keep in mind that the benefits of smart home technology can go beyond insurance savings. “Investing in smart home technology can ensure the peace of mind of customers,” says Sobal, “knowing that their home is better protected.”
This article was provided by The Associated Press on the NerdWallet personal finance website. Sarah Schlichter is a writer at NerdWallet. Email: firstname.lastname@example.org.
NerdWallet: 9 Ways to Lower Home Insurance Rates https://bit.ly/nerdwallet-save-on-homeowners-insurance
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