How to get a homeowners insurance discount for having a smart home device

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  • Homeowners insurance companies offer discounts for smart home devices.
  • Smart home detection devices can prevent fire, water, and electrical hazards.
  • The discount isn't as important as the peace of mind for homeowners.
  • See Insider's guide to best homeowners insurance companies.

Most homeowners insurance companies offer a discount if you have smart devices that detect electrical, fire, gas, or water hazards because it decreases the likelihood that an accident will happen and you'll need to file a claim.

But, considering that your home is one of your biggest assets, the reason for buying a smart home device should not be for the insurance discount, but instead to protect your home from damage — insurance perils —  that may require you to repair and rebuild your home.

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Smart home devices protect your home from fire and water damage

Homeowners insurance protects your belongings and furnishings from damage due to covered events, known as insurance perils. A peril is an event that may damage your home or belongings. Common insurance perils include theft, fire, lightning, hail, and vandalism. 

Water damage counts for 30% of homeowners' claims, Nationwide told Insider. This is why it offers a smart home device discount to homeowners using a water or fire prevention device.

State Farm provides homeowners with Ting, a smartphone app that detects electrical faults preventing fires. Amica Mutual provides discounts for devices that detect water or gas leaks. 

The amount of the discount offered varies by company. Additionally, it doesn't matter which smart device you purchase. Most homeowners companies require proof of installation of any smart home device that prevents or detects water, fire, gas, or electrical leaks or faults.

What about data privacy with smart home devices?

In this age of smartphones and smart televisions, every smart device comes with the risk of hacking. It is a reality of life in a tech-savvy world. 

However, many homeowners insurance companies offer cyber liability protection as an add-on feature. Each company has varying coverage, so it's best to talk to your agent to find out what is included. Cyber liability add-on coverage ranges from $25 to $60 a year.

Are smart home device discounts worth it?

Like any other appliance or electronic device you purchase for your home, maintenance and warranty contracts can be purchased from the manufacturer or retailer. Especially if an insurance company is offering free smart home detection systems, it is worth the peace of mind.

But the main question shouldn't be whether the insurance discount is worth it, but whether it's worth protecting your home and belongings to have a smart home device.

Ronda Lee

Associate Editor, Insurance

Ronda Lee is an associate editor for insurance at Personal Finance Insider covering life, auto, homeowners, and renters insurance for consumers. Before joining Business Insider, she was a contributing writer at HuffPost with featured articles in politics, education, style, black voices, and entrepreneurship. She was also a freelance writer for PolicyGenius. She worked as an attorney practicing insurance defense and commercial litigation. You can reach Ronda at rlee@businessinsider.com.

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Source: https://www.businessinsider.com/personal-finance/smart-device-home-insurance-discounts