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How Smart Homes Can Keep You Safe — And Save You Money

Insurance companies are taking note of smart home tech — and it could save you both money and peace of mind.


The phrase “the Internet of Things,” while coined more than a decade ago, has only recently begun to overwhelm mainstream tech vernacular, thanks to the proliferation of app-enabled devices and RFID chips. At its core, the concept is all about connectivity — less a platform confined to a screen, and more of a network by which gadgets can communicate.

The implementation of the Internet of Things has been diverse, with some applications being more practical than others. Prosaic objects, like a salt shaker or hairbrush, don’t grow any more useful with the addition of internet-enabled accelerometers. But others, both new creations and existing devices, benefit greatly from increased connectivity — like home security systems, for example.

From Bluetooth-enabled door locks to light bulbs that sync with thermostats, smart home technology — while often scrutinized for the risk of cyber break-ins — is improving safety, security and energy efficiency, and insurance providers are taking note. Major companies like Nationwide, Farmers, Travelers and American Family all offer discounts to those who invest in smart products that enable improved surveillance — most on a case-by-case basis, dependent on region and specific technology.

“The goal is to encourage clients to adopt technologies that both make them personally safer and reduce the chance of having a loss — a win for everyone involved.”

Liberty Mutual first began offering smart home discounts in 2015, specifically for the Nest Protect smoke and carbon monoxide detector and Vivint Smart Home platform. Its product roster has since expanded to include devices like the Canary security system and August Smart Lock, of which Liberty Mutual is an investor. “These technologies provide peace of mind and help to keep you safe by detecting events that trigger alerts on smartphones, wherever [customers] may be,” says Chad Lovell, managing director of strategic partnerships at Liberty Mutual Insurance, adding that while discounts vary according to levels of monitoring (audible, self-monitored or professionally monitored), insurance savings can double if a customer enables data sharing for incident verification purposes.

Similarly, State Farm has partnered with companies like ADT and Canary to offer exclusive discounts for existing customers, while Allstate offers smart home security discounts ranging from 5 to 15 percent, depending on state and specific technology, favoring systems that alert homeowners of fires or break-ins, such as Canary, and water detection and shut-off devices. Yet while insurance providers are eager to tap into smart home technologies and reward customers for adopting safe habits, nascent technologies require a great deal of financial and logistical fieldwork.

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“In order for an insurance carrier to get state approval to offer discounted rates, insurance companies have to demonstrate that devices have contributed to a statistically meaningful reduction in losses,” explains Christie Alderman, vice president of client products and services, personal risk services, at Chubb, which offers smart tech discounts up to 7 percent for whole-home water shut-off devices and up to 10 percent for centrally (read: professionally) monitored fire and burglary alarms. “In just the last two years, there have been so many new “smart” devices introduced, and the market is fractured across so many manufacturers that the industry is still trying to aggregate performance data. This will just take some time to have enough data points to understand exactly how these devices move the needle on cutting losses.”

“Also, ‘smart’ devices come with some vulnerabilities, such as hacking, that have to be considered,” Alderman adds. “Obviously, no insurance company wants to introduce risks into a client’s home. The goal is to encourage clients to adopt technologies that both make them personally safer and reduce the chance of having a loss — a win for everyone involved.”

Below, find five industry-leading smart security products that promise cost savings and peace of mind.

Nest Protect

Google-owned smart home company Nest first made waves with its thermostat, but it’s the Nest Protect, a smoke and carbon monoxide detector, that’s catching the eyes of insurance providers. The self-testing alarm sends phone alerts and vocalizes the room in which smoke or noxious gas is detected. Better yet, Nest Protect sends phone alerts, rather than beeping, when batteries are low, and can be hushed remotely — eliminating unfortunate 3 a.m. wake-up calls.

Recognized By: Liberty Mutual, American Family
Integrations: syncs to wi-fi-enabled GE appliances, Rachio sprinkler system and more through Works With Nest

Buy Now: $119


As the first Internet of Things device to receive a security certification for end-to-end data encryption from ICSA Labs, Canary is among the most trustworthy smart home devices on the market today. Offering 24/7 remote HD video monitoring through a wide-angle camera lens, the system sends mobile alerts if unexpected motion is detected, allowing users to set off a 90-decibel siren and notify local emergency response teams. Canary automatically recognizes when members have left or entered the home and stores 30 days’ worth of activity data in a timeline. The system also monitors in-home air quality, temperature and humidity, notifying customers of any unexpected changes.

Recognized By: State Farm, Liberty Mutual
Integrations: Customized IFTTT recipes programmed through Wink shortcuts

Buy Now: $379+

August Smart Lock

August serves as an upgraded deadbolt that keeps track of entries and exits and makes it easier to grant access to visitors, dog walkers and house cleaners by way of temporary virtual keys. Also in the August Smart Lock family is a doorbell camera and smart keypad — both of which sync with the lock and offer improved visibility and security.

Recognized By: Liberty Mutual
Integrations: Apple HomeKit, Nest Cam and ADT Pulse, among others

Buy Now: $229

ADT Pulse

ADT Pulse, a suite of ADT Home Automation products, allows for remote monitoring and control of entries and exits, thermostats, lighting and alarm systems — burglary, fire and carbon monoxide, alike. Video surveillance and ADT’s 24/7 professional monitoring come standard.

Recognized By: State Farm
Integrations: Amazon Echo, Kwikset Smart Lock, Nest Thermostat

Learn More: Here

Vivint Smart Home

A comprehensive interconnected system of devices addressing temperature control, home access, burglary prevention, fire and carbon monoxide detection and in-home monitoring — Vivint’s Smart Home is a full-fledged, high-tech security system. Live video surveillance and remote thermostat and door control are bolstered by Vivint’s team of on-call professionals. The system stores 30 days of data at a time, and creates a secure, automated system through programmed rules, like locking doors at night. Perhaps most appealing is that Vivint’s devices are ultra-minimal in design, blending in with their surroundings and rendering black-box eyesores a thing of the past.

Recognized By: Liberty Mutual
Integrations: Amazon Echo, Kwikset Smart Lock, Nest Thermostat

Learn More: Here

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