How the rise of smart home technology will impact homeowners

Nicole George
Nicole George
Jul 5, 2017

Smart home technology can help property owners reduce their risk. In fact, homeowners who invest in smart home devices now may be able to lower their home insurance premiums for years to come.

To better understand the impact of smart home technology on homeowners insurance, let’s take a look at four state-of-the-art devices.

Security system

Imagine what it would be like to receive an instant text or email alert if a burglar enters your home. Thanks to smart security systems, you can take your home security on the go.

A smart security system puts you in control of your house from any location, at any time. It provides real-time alerts if an emergency takes place at your home, regardless of whether or not you’re there. Plus, the system delivers text and email notifications to alert you to possible security threats, such as if a window has remained ajar for too long or a safe that contains valuables has been opened.

Perhaps best of all, a smart security system is simple to deploy and easy to use. This means you won’t need to allocate significant time and resources to learn how to use a smart security system. Instead, within a matter of minutes, you should have no trouble boosting your home’s security with a deluxe system.

A smart security system often requires an upfront investment, but the benefits usually pay for themselves over time.

Adding monitored safety and security devices can sometimes help homeowners dramatically lower their home insurance premiums. Thus, homeowners who invest in smart security systems today can protect their residences like never before and reduce their home insurance expenses.

Water leak detector

Believe it or not, flood insurance is not included in a standard home insurance policy. However, the National Flood Insurance Program (NFIP) offers flood protection that costs an average of $700 annually, according to Kiplinger.

Although your home might be located outside a floodplain, it is important to remember that even one inch of water can cause substantial property damage. If you lack flood insurance, you may be forced to cover the costs to repair or replace flood-damaged property out of pocket.

Now, smart water leak detectors can help homeowners quickly detect and address flooding caused by a burst pipe, water heater or dishwasher. These detectors leverage low-power wireless technology and sensors that connect to a central hub within a home. Homeowners can view a water leak detector’s status on a smartphone or tablet and receive an instant alert any time a leak happens.

Smart water leak detectors help homeowners take a proactive approach to flooding. Though leaks from water pipes in the home are usually covered by homeowners policies, insurance companies may give customers discounts for having water detectors because it means the insured can act immediately when alerted to a leak, reducing the potential damages.

On the other hand, these devices alone won’t stop floods from happening, and homeowners who live both inside and outside floodplains may suffer flooding due to heavy rain, hurricanes and assorted natural disasters.

Ultimately, smart water leak detectors may prove to be an ideal complement to flood insurance. With the combination of smart water leak detectors and flood insurance, homeowners can get the support they need to mitigate the effects of flooding faster than ever before.


Home heating and cooling expenses can add up quickly. Fortunately, a smart thermostat can give you additional control over these costs both now and in the future.

A smart thermostat enables a homeowner to take human error out of heating and cooling a residence. It allows a homeowner to increase or decrease a house’s temperature based on when he or she is home, thereby reducing a property owner’s energy consumption.

Moreover, a smart thermostat offers actionable home energy insights that a homeowner can analyze at any time. This ensures a homeowner can track energy consumption patterns and trends and explore innovative ways to manage energy costs.

Many home insurance companies are embracing smart thermostats too. Some insurers are already providing monthly or annual discounts to homeowners who install smart thermostats – a trend that appears likely to continue in the foreseeable future.

Smoke detector

A smart smoke detector delivers unparalleled peace of mind, as it enables you to stay up to date if a fire emergency happens when you’re away from home.

Most smart smoke detectors are simple to install and start working instantly. That way, if a fire emergency happens inside your home, you’ll receive an immediate text or email, and the local fire department will be notified as well.

For homeowners, it may be worthwhile to replace preexisting smoke detectors with smart ones. Smart smoke detectors offer immense power and will continue to perform for an extended period of time. In addition, many home insurance providers are partnering with smart smoke detector manufacturers to offer discounts on these devices—along with reduced home insurance premiums—to ensure that large groups of homeowners can enjoy their benefits.

Clearly, many devices are available that can transform the way you manage your house.

Don’t expect the demand for smart home technology to slow down any time soon, either. For instance, market research firm MarketsandMarkets has projected the smart home technology market could be worth $121.73 billion by 2022, up from $46.97 billion in 2016. This means it may be only a matter of time before many new devices become available to assist homeowners across the United States.

If the push for smart home technology continues, expect home insurance companies to step up their efforts accordingly. As more home insurance companies and homeowners realize its benefits, both parties can work together to reduce home risks nationwide.