Tech Times | Smart homes could be cheaper to insure - Linking doorbells and thermostats to the Internet can cut down on risk
Insurers such as USAA and American Family have lately begun offering to strike a high-tech bargain: wire your home with Internet-connected devices such as a new thermostat, and get a discount on your home insurance policy in return. Offers like that could speed up the adoption of smart gadgets, revamp the insurance business, and transform how we manage our homes. In the future, your insurer might call a plumber before a pipe bursts, for example. But the data needed to help prevent leaks or burglaries will also introduce new risks, such as vulnerabilities to data loss or ransomware.
State Farm offers a discount on your home policy for installing a Canary home security monitor, for example. Liberty Mutual will send you a Nest Protect smoke detector, worth $99, free of charge and cut the cost of fire coverage. Some insurers want to go further. They think that urging us to wire our homes with Internet-connected devices will open up a flood of lucrative new data that can make their existing business of handling claims more efficient while creating a new relationship with the customer. With a feed of data from your home, an insurer could help you prioritise maintenance tasks and fix problems such as leaky pipes before they caused major damage.
Jon-Michael Kowall, assistant vice-president of innovation at USAA, says he's aiming to create something like a "check-engine light for the home". For example, an insurer might be able to warn someone with moisture sensors installed that a pipe is likely to fail soon, or even deliver notifications about whether or not a child made it home from school on time.
But insurers' dreams of rewiring how we look after our homes have raised questions about privacy and security. For example, the same data that allows a company to prevent damage from water leaks might also be used to profile some customers as being more likely to engage in risky behaviour, and their premiums might quietly be raised. Both American Family and USAA say they communicate clearly with policyholders and make sure that people understand what will be done with their data.