Smart-Home Devices Could Save You Money on Home Insurance
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A smart thermostat can turn up the heat in your home before you roll out of bed. A smart speaker can play your favorite podcasts with a voice command. A smart lightbulb can be turned on or off from across the room.
But smart-home devices aren’t just about convenience. Because some of them can help keep your home safe and secure, they could also earn you a discount on your homeowners insurance.
Discounts for smart-home devices
NerdWallet reached out to more than a dozen insurance companies and found that many of them offer discounts to homeowners with smart-home devices designed to prevent water damage, fire or theft. In our research, we found companies advertising homeowners insurance discounts up to 20%, depending on the device and where you live.
Among the companies we surveyed, we saw discounts for a wide variety of devices, including:
Water leak sensors.
Fire or smoke alarms.
Temperature monitoring systems.
Monitors for your home’s electrical network.
If you already own a smart-home device, ask your carrier whether you’re eligible for a discount.
» MORE: Does home insurance cover theft?
These savings are in addition to the homeowners insurance discounts the companies will give you once you install the devices.
Keep in mind that in some cases, you may need to share data from the devices with your insurer to be eligible for a discount.
Below, see how a few major insurers handle discounts for smart-home devices.
Allstate
Allstate policyholders can save up to 5% by installing approved smart devices like connected security cameras, water leak detectors, or door and window sensors. In certain states, you may also be able to save $20 on an annual service plan from Canary, which makes security cameras.
Amica
Amica offers discounts for a wide array of smart-home devices, including smart security devices, temperature monitoring systems, leak detectors, fire alarms and electrical fault monitors. Amica also provides discount codes you can use when buying devices from companies like Moen, Guardian or Kangaroo.
Discounts vary depending on which device(s) you have and where you live. Generally, however, you’ll get the best savings for devices that are online and monitored by a third party.
Chubb
Chubb, which insures high-value homes, offers discounts for things like water or gas leak detectors, temperature monitoring systems, permanently installed generators and automatic valves that shut down gas lines in the case of an earthquake.
Chubb will also reimburse up to $5,000 to install a system to detect and control water leaks and up to $2,500 to install a generator if you’ve had a covered water damage claim.
Cincinnati Insurance
Cincinnati Insurance policyholders can save 2% to 8% by installing automatic water shutoff devices, centrally monitored fire or burglar alarms, temperature sensors or gas valves that shut off automatically in case of an earthquake. The company partners with water sensor providers to offer discounts on the purchase of certain smart-home devices.
Farmers
Farmers offers savings of 5% to 20% for smart-home devices that protect against water leaks, fires or theft. Larger discounts generally apply to devices with professional monitoring.
Nationwide
Nationwide offers free smart-home monitoring systems to policyholders in some states. Exact discounts depend on the device and where you live, but the company gives discounts to policyholders with smart-home devices that help prevent theft, fire or water leaks.
State Farm
State Farm policyholders in most states can sign up for three years of free Ting service. Ting provides a plug-in that monitors your home for electrical problems that could cause fires.
State Farm also partners with ADT in certain states to offer a free smart-home security system and a discounted rate on professional monitoring. You can get a discount on your homeowners policy by signing up for the service and sharing your system usage data with State Farm.
Travelers
Travelers offers discounts for devices like fire alarms, security systems, and water sensors and shutoffs. Savings vary by device and location.
USAA
With USAA’s Connected Home program, you can get a discount for installing at least two smart-home water leak detectors from Roost or Resideo. You must share usage data from the app with USAA to get the discount.
Why insurance companies reward smart-home devices
Insurance companies offer discounts for smart-home devices because the technology can help catch problems early, potentially preventing expensive claims.
Say you have a smart water sensor next to your water heater, and the appliance springs a leak. The device could sound an audible alarm and send an alert to your phone, enabling you to take immediate action. (Some devices even have an automatic water shut-off feature.)
Without the sensor, you could end up filing a claim, paying a big deductible and having to find contractors to clean up the mess. But with the sensor, the damage might be so limited that you wouldn’t need to make a claim at all.
Should you buy smart-home devices?
The cost of smart-home technology can add up quickly. If you want to invest in a protective device but aren’t sure which ones are worth the money, consider your home’s unique risks, says Karen Collins, a vice president at the American Property Casualty Insurance Association.
For instance, if your home has older plumbing, water sensors might be worth buying, Collins says. But if you live in a neighborhood with high crime rates, your money might be better spent on a home security system.
Ask your insurer whether the devices you’re considering would qualify you for a homeowners insurance discount. Depending on the amount of the discount and the cost of the devices, they might pay for themselves within a few years.
Keep in mind that the benefits of smart-home technology could go beyond insurance savings. Having smart-home devices can help give you peace of mind, knowing that you could be alerted before a small problem turns into a bigger one.
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