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Could a Smart Home Reduce Your Insurance Premiums?

The growth of the Internet of Things (IOT) has seen a rapid adoption of smart technologies within the home. Over the past 40 years, not much changed in basic functions of the home, such as lighting, temperature control, and security, until the developed of connected devices, which have suddenly opened up the market and given the average homeowner access to technologies that once were reserved for the rich and famous.

A survey reports that 77% of the British public know what connected devices are, and a massive 79% have a smartphone with which to control their Smart Home should they so wish.

The benefits of a connected home often form the butt of jokes, with the punchline being someone asking Alexa or Siri to carry out some menial task on their behalf, saving them a task that would have required them only to reach out their arm. But there are much wider benefits to their smart devices than just changing the radio channel, turning on the lights, or changing your fridge temperature by one degree. The main benefit is in home security. This is how it affects your home insurance.

Films of the past decades have made us aware of the high technology solutions for security adopted to secure priceless pieces of art or diamonds. Such systems used by art galleries and museums are now readily available and affordable for the average home, greatly increasing security measures for many who once relied on just locks and bolts to secure their home.

Which smart devices have brought the home security market so far in such a short period of time?

Video Doorbells

Look down your road and you will probably find one or two neighbors who’ve already adopted a smart doorbell such as a Ring system. The bell doesn’t look much different from a standard doorbell or small intercom system but look closely and you will notice that it has an integrated camera. What is really different is the technology behind the doorbell device ,which connects it to your home WIFI and your other smart devices, including your smart phone, even when you’re outside the home, even abroad.

The smart doorbell notifies your phone when motion or sound, depending on your settings, indicate that someone has either pressed your doorbell, or has even just walked up your driveway. A live video stream can then be viewed from your phone or tablet, allowing you to communicate directly with the person at your doorstep through the device, asking them to place your parcel in your porch or call back when more convenient.

The advantages of this to security are obvious: you have eyes and ears on your front door 24 hours a day even when you’re not home. And the recorded footage can be used to deter or identify uninvited intruders. But what about the rest of your home?

Smart Sensors and Cameras

Other smart sensors and cameras, often as inexpensive as £30 ($37) per device, can be placed around your home and property to notify you of movement at windows, doors, or inside the building. Again, notifications can be sent to your phone so that you can respond to a would-be burglar, call the police, or trigger another smart device that turns on lights or plays noises. Automatic responses to triggered sensors can also be set up such as security lights turning on.

Will this Reduce Your Home Insurance?

Insurance companies like are starting to provide a reduction in home insurance premium for homeowners who have installed security devices, particularly those of well-known manufacturers, so check with your insurer before choosing your devices. The advantages to you and the insurer are obvious, with damage to property and contents likely reduced in a home where connected technologies are deployed.

What Is the Future of Connected Devices?

Interestingly, a spokesperson for Insure4Retirement, a UK insurance broker, pointed out that 30% of home insurance claims result from water damage from internal leaks, not flooding, according to the Association of British Insurers. Technologies that sense and notify of water leakage are already on the market that sense and notify of water leakage; some can shut off the water supply to the leaking system. Although many homeowners are unaware of these technologies and insurers have yet to lower premiums for homes where they are installed, once some insurers innovate in this area it is likely that the devices will be adopted by homeowners.

1 thought on “Could a Smart Home Reduce Your Insurance Premiums?”

  1. One also needs to consider the security of the devices themselves when choosing to place them in one’s house. Defects in the device code could leave you exposed to malicious actors so it should also be considered whether the manufacturers provide software updates for the devices and how easily it is to apply those updates.

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