Insurance for smart homes
Our homes are increasingly connected, with innovative smart technology that lets us control our domestic devices from afar, monitor our energy use and protect our homes from crime.
But what impact do smart homes have on home insurance? Read our guide to find the right insurance for your connected home.
Our homes are increasingly connected, with innovative smart technology that lets us control our domestic devices from afar, monitor our energy use and protect our homes from crime.
But what impact do smart homes have on home insurance? Read our guide to find the right insurance for your connected home.
60-second summaryWant a quick breakdown of insurance for smart homes? Here are the key points:
|
What is smart home insurance?
Smart home insurance is a policy tailored to a property that uses smart technology. The idea is that WiFi-connected devices such as motion sensors and leak detectors can help you prevent theft or damage. This, in turn, can reduce the number of insurance claims you need to make.
At least one UK provider is offering a dedicated package that comes with wireless sensors and a smart home app. However, smart home insurance is not yet a mainstream product.
If you have smart tech for your home, or you’re thinking about investing in connected devices, it’s worth speaking to your home insurance provider to see if they can offer you a discount.
What is a connected home or smart home?
A connected home or smart home is one with a network of gadgets that work together to monitor and automate the things you usually do around the house.
There’s lots of ways a home can be smart, depending on the devices you choose. For example, you can:
- Check who’s at the door
- Turn the heating on before you get home
- Monitor pipes to alert you to a water leak.
These smart devices are part of the “internet of things” (IoT). They communicate with each other via the internet, and you can control them from your smartphone, tablet, home hub or another device, wherever you are.
Is there a difference between a smart home and a connected home?
Although the terms are often used interchangeably, strictly speaking they’re not quite the same thing.
- Connected devices are those that connect to the internet, either to transmit data or so that they can be managed remotely.
- Smart devices are more complex than connected devices, with operating systems that enable them to perform multiple functions and interact with other devices. Smart devices don’t just transmit data, they react to data intelligently to make your life easier.
A smartphone, for example, is a smart device, while a window sensor is a connected device.
What devices are used in smart homes?
Popular smart home devices you can use around your home include:
Smart home security systems
- WiFi-powered intruder detection systems allow you to monitor your home from your smartphone.
- Can include window and door sensors, motion sensors, smoke detectors and security cameras.
Connected water sensors
- Can be attached to your pipes to detect leaks.
- Alerts are sent to your phone as soon as unwanted water is detected.
Smart doorbell or door cams
- See who’s at your door before you open it.
- Be alerted to anyone snooping around outside your house while you’re away.
Smart locks
- Eliminate the need for keys so they can’t get stolen.
- Open and close doors using your smartphone, fingerprint or with a keycode.
Smart light switches
- Can be programmed to turn off and on while you’re away.
- Gives the impression that someone is at home.
What are the advantages of having a smart home?
As well as working to make your life that little bit easier, smart home gadgets are designed to make your home safer.
- Smart home security systems can act as a deterrent to would-be burglars. If your home does get broken in to, the automated security system may send an alert to your smartphone, capture footage of an intruder and even alert the police directly.
- Smart lightbulbs allow you to turn the lights on while you’re on holiday, which can ward off potential thieves.
- Water leak detectors could potentially save you hundreds of pounds in claims costs, if the leak is detected early enough.
What are the pitfalls of having a smart home?
Smart homes aren’t without their downsides, so it’s important to consider these too.
- Data security is the main concern about connected homes. Smart devices are online so they could be hacked, compromising your data and privacy. In rare circumstances, they could even be taken over by someone else.
- Smart home tech can be expensive, especially if it requires professional installation or if there are ongoing fees to maintain the system.
- Power outages and internet outages could cause problems. For example, if you’re investing in a smart lock, it may be wise to make sure you still have a way of manually locking and unlocking your door. A back-up plan is helpful in case the power runs down or the smartphone you use to unlock the door runs out of battery.
How does a smart home affect my home insurance?
When you start to build a connected home, there are two things you need to consider:
- The value of the gadgets you’ve bought – what happens if they’re lost, stolen or damaged? Are they covered by your home contents insurance?
- The effects your gadgets could have on your home – smart devices could help prevent break-ins and leaks, but they could leave you vulnerable to hackers if the correct safety measures aren’t followed.
Home insurance policies will have a single item limit, which is the maximum you can claim for any one item. If one of your gadgets is worth more than this, you’ll need to list it separately on your policy.
Will a smart home make my insurance cheaper?
Most home insurance premiums are based on the individual security measures you have in place rather than the smart home system itself.
Home insurance providers ask customers questions about home security. Having good security systems installed could help reduce your premium, especially if you’ve been a victim of break-ins and theft in the past. Plus, connected home sensors that can spot trouble before it becomes serious could be another way to keep premiums down.
Even if your home insurance provider isn’t quite ready to put their trust in smart tech yet, don’t let that deter you. If connected devices can prevent you from having to make a claim, you’re likely to see lower home insurance premiums in future.
Frequently asked questions
Which smart devices could impact on my home insurance?
Smart devices that help protect your home against fire, floods or theft would be the best bet for reducing the costs of your home insurance premium.
What’s best for your household will depend on the risks you face most at home. For example, if you live in an area with high incidences of crime, a home security system – whether it’s smart or not – could help lower your insurance premium. Meanwhile if you live in an older property with rusty pipes, a water sensor that detects leaks could be a very useful addition.
If my smart home security devices malfunction, will I be able to claim on my home insurance?
This would depend on the context and the terms of your policy. There are certain situations where smart technology could malfunction and make your home less secure.
For instance, if you have a smart lock on your front door and it incorrectly opens and lets a burglar in, your insurance provider may not agree to pay out for a home contents insurance claim. In this situation, a claim may be excluded in the same way as if you left your front door unlocked when you went out.
It’s worth speaking to your insurance provider if you have any questions about your smart home security system and how it might impact claims or premiums.
Is my smart home vulnerable to hackers?
Anything that’s connected to the internet is potentially vulnerable to hackers. As more homeowners introduce smart technology, it’s likely there’ll be an increase in crime targeting that technology.
That’s why it’s important to take the necessary precautions when installing any new smart devices, including changing default passwords by setting up new secure passwords, installing any updates and using two-step verification where possible. Make sure you return any device to its factory settings when you sell your device, give it to someone else or otherwise dispose of it. This should delete all personal data.
A good source of information on how to keep your devices and your home safe is the government’s National Cyber Security Centre.
Anna McEntee – Home, travel and pet insurance expert
Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.