Study: One-Third of Households with Insurance Would Switch Providers to Acquire Smarthome Devices

One-third of U.S. internet-enabled households with homeowner’s/renter’s insurance would switch providers to acquire smarthome devices, a new study shows.

Parks Associates’ research study, Insurance Opportunities in the Smart Home, examines 8,000 households to determine consumer preferences for IoT devices that can impact insurance premiums or claims. It also evaluates the opportunity for IoT growth through the insurance channel.

With insurance costs rising nationwide, homeowners and insurers are both looking for solutions to reduce premiums, claims and payouts. Smarthome devices can detect and prevent costly damages, particularly rated to water and faulty wiring, the study states.

Water-related damage was the most common home damage, with 26% of households reporting this kind of damage. According to the Insurance Information Institute, the average cost of water damage/leaks is $9,633, while the average for flood/weather-related damage is $8,625.

Partnerships between insurance and smarthome companies highlight the alignment of both industries’ goals and business strategies. For example, a recent collaboration between Nationwide and Resideo enables homeowners to get insurance discounts when they acquire specific device packages, to be announced in early 2024. This partnership extends the smart home to more proactive use cases, where the products sense and report potential risks before they create costly damages, according to the authors of the study.