How the increase in technology in our homes will affect home insurance premiums in the future

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For a number of years now we’ve been told we’ll all be living some kind of Jetsons existence in the foreseeable future or, from a less animated fictional perspective, one perhaps more akin to Blade Runner-esque dystopian vision.

Either way, technology will govern our lives and dictate pretty much everything that we do, see, feel, think and so on.

Having said that the greatest minds of previous generations (most notably the 1950s) envisaged airborne cars and monorails in the sky, and the populace surviving on a single blue tablet per day as opposed the more conventionally accepted three square meals. And look what happened with that prediction?

However the future is already here in some respects. Just take a glance around your home now, and no doubt you’ll see a number of different devices – laptops, tablets, smartphones – as well as a flat-screen TV (either a HD, LED or 3D) and a games console or two. And that’s just the minimum amount of tech the average household has!

Technological advances usually bring with them an element of added convenience into our lives, but as well as that our rapid adoption of household tech could have another benefit – reduced home insurance premiums.

This has nothing to do with all the devices you seem to be collecting though. It’s all about what is called the Internet Of Things, which basically means all of the electrical appliances in our homes will soon have the potential to be connected to the internet – which means they can receive, and send, data.

OK, the almost-certain trade-off is that there’ll be quite a lot of us who are not keen on being ‘monitored’ in our home, which as many people’s Orwellian-inspired nightmare will take a bit of getting used to. However, an increasing number of motorists have quickly adapted to telematics-based car insurance policies, so there’s hope and positivity abound. Not to mention an awful lot of money to be saved, in exchange for having our driving patterns and behaviour behind the wheel observed.

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Well, the same methodology (well, sort of) applies to our more creature comforts; namely our domestic arrangements according to many insurance experts. Having pretty much mastered the associated dark arts surrounding black box car insurance (whereby carriers have made great strides in perfecting devices that help them to assess risk and aid in the underwriting and claims processes), interests have of late shifted towards our homes; with data analysis absolute key to this tech-led agenda too.

Ninety Consulting – a London-based firm who describe themselves on their website as ‘a challenger ecosystem, designed to bring about business and social change’ – recently published a white paper going under the banner of ‘The Connected Home’. An extensively-researched document which seeks to address the perceived evolution of smart home technology and more pertinently, just how the household insurance sector will be positioned to compile reams of real-time telematics data which will essentially equip them for risk assessment and loss prevention like never before.

Samsung Smart Fridge - Silver

Samsung smart fridge

Ninety Consulting were quick to point out that the unprecedented successes of smartphone and smart TV has inadvertently (or maybe not to the more cynical amongst you) conspired to create what’s been dubbed a ‘natural interface’; one which empowers consumers/policyholders to interact directly with what are increasingly becoming mainstay devices found in many UK homes.

Take for example wireless connectivity, which affords individual devices to effortlessly communicate with one another (just how space-age would that have sounded six decades ago?) when they’re not even located in the same urban living space as each other. And not just another like-minded yet faceless device, but the world beyond the four walls. Scary when you put it that way, but nevertheless, already amongst us and thriving, whilst the future is only going to get even more science fact.

But like we hinted at the top, all this tech plays into the consumer’s/policyholder’s hands, financial as well as lifestyle-amenable; which is definitely no bad thing and actually, nothing to be unnecessarily frightened about the growing prospect of.

Common and emerging applications are becoming increasingly commonplace within the more familiar contextual surrounds of our crash pads, and the by-product of that is the way insurers react and indeed, pro-act to the onset of such gadgetry.

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Here we take a brief ganders at the new wave of household tech, all of which will play an integral part in potentially reducing our buildings and home and contents policy premiums somewhere down the line, if they’re not having a notable impact on it thus far. Such as intruder alarms which can automatically detect intrusions, call contacts (or authorities) to report break-ins or suspicious activities together with capturing video footage or photographic evidence.

Elsewhere there’s the thermostats which can sense residents’ routines and control the temperature and heating/cooling equipment accordingly, whilst lighting-wise there’s systems which can automatically control individual lights from an app and set away-from-home schedules. And then there’s the increasing presence of smoke and carbon monoxide detectors which have the ability to alert homeowners to the advent of smoke or other gases, automatically shutting down heating elements, ovens or other relevant items.

Meanwhile there’s the refrigerators which can make homeowners instantly aware the moment power outages strike, or alternatively should a door be left ajar, while many ovens can preheat based on calculating the homeowner’s arrival time, automatically set cooking timers, and check cooking status without anyone being present in the room.

Other technology which is amongst us here and now is electronic door locks, those which can remotely lock (or unlock) based on the authorization of the person trying to enter. These types of locks can include fingerprint scanning or other types of recognition software, as well as keep homeowners informed about who is entering (and leaving) the property, when they left and how long they were there.

What’s more, water alarms exist which can text homeowners when they detect water leaking from tanks, water heaters and/or appliances; alarms which can also automatically shut off the water supply to the affected items. And what about the washers and dryers that can automatically start/stop cycles, monitor load progress and send alerts if problems arise? And then there’s the water leak detectors which can be placed in basements for early detection of floods, and that can also be extended to undersoil groundwater monitoring as well.

All the above and more can have significant bearings on home insurance premiums, bringing down prices by virtue of their very existence due to the underlying fact (very in some cases) that the alerting nature of their utilization can safeguard against potential destructive forces coming into play.