Smart Homes May Lead to Reduced Premiums

When the auto industry introduced smart cars, the insurance industry had to figure out how to insure them.

Luckily, engineers intended smart cars to be safe cars. Recently, the 2014 Smart Fortwo and the Scion iQ received “Good” scores in three out of four crashworthiness tests conducted by the Insurance Institute for Highway Safety (IIHS).

This certainly makes drivers and insurance agents happy, but smart technology isn’t limited to the roads. One of the next innovations many people want to take advantage of is smart homes.

According to a survey recently conducted by Harris Poll for Lowe’s, most Americans crave the ability to control things in their home by accessing their phone. Sixty-two percent of those polled felt that a smart home was crucial for “monitoring safety and security.”

Cranky morning jokes aside (e.g., How does turning on your coffeepot from the comfort of your bed make you safer?), some smart home features are designed for convenience and others for energy efficiency.

Is the ability to remotely adjust the coffeepot or the thermostat likely to impact your insurance? Probably not.

However, some smart home features will. In fact, your insurance rates may drop significantly if, for example, your home comes equipped with moisture sensors located near sinks and toilets (think flood avoidance).

Or, what if your built-in security system is able to notify you via a phone app as soon as something goes wrong at home, such as a break-in?

Other apps allow you to lock your door from afar. And Nest-a company heavily involved in designing smart technology-has just released an advanced fire alarm that alerts you at the first sign of smoke and senses carbon monoxide.

If you’re considering purchasing a smart home or making smart upgrades to your current home, don’t forget to notify your insurance agent. It saves to be smart.