Smart Homes are a smart investment, just ask your insurance agent.

I want to lower your deductible, Dave.

For most of us, the decision on whether or not to invest in smart devices for the home depends on two things: increased convenience and cost.  Some devices offer cost savings, like smart thermostats or lights, however, for the most part, the largest benefit to these technologies is convenience.  This could be changing as other industries start to take advantage of the technologies.

Show me the actuarial tables

Accenture, a global consulting firm recently released a study outlining the benefits that the Connected Home offers to insurers.  Among these benefits are things like better risk management, more accurate underwriting, and other things that the layman doesn’t really care about, but here’s how it matters:  insurance discounts for home with connected devices.

State Farm and American Life both offer discounts for homes that use smart home security systems.  American Life even offers an up front discounts to encourage its customers to invest in the Ring Video Doorbell.  These investments by your insurer into home safety devices might seem obvious, but American Life goes so far as to offer a $99 subsidy for Nest Smart Thermostat users.

Insurers look toward the future

In addition to the obvious benefits of increased risk monitoring for insurers, they are also keeping their eye on the technologies that are emerging, and in some cases, actually teaming up with the tech start-ups.  Ryan Ryst, director of innovation, at American Family Insurance believes that in addition to preventing losses, connected tech should work to add value to a service (insurance) where 90% of its customers never use it.  Ryst, interviewed by Fortune Magazine, imagines a future where devices like the Amazon Echo can remind people of best practices in real time.  Maybe in the form of telling that your smoke detector batteries need changing, or that you’re leaving a door unlocked before heading out of the house.

Heather Paul, a public affairs specialist with State Farm makes a similar point.  She notes that insurers have been collecting data on risk management for decades.  Insurers are the world’s foremost experts on managing household risks, from fires to floods, to burglaries, they have the data for all of it.  Paul’s vision for the smart home is to be able to share that data with policy holders in a more proactive, practical way.


Smart home technologies offer much potential to the home user but also, increasingly, to other service based industries.  The good news for us is that as this adoption becomes more prevalent across different industries, we will see continued cost benefit make its way back to us, and our collective bottom lines.