Smart home technology and home insurance - What you need to know

Smart technology at home

Buying a home is undoubtedly one of the largest purchases you’ll make in your lifetime, so it’s safe to say that you’ll want to protect it at all costs. Having a standard home insurance policy in place is something that most people will have and while it’s not necessarily a legal requirement, it is something that you should have in order to protect your home, its belongings and the people who live there.

With the rise of smart home technology, there’s never been a better time to be aware of how having an automated home and how using smart devices affects your home security and your home insurance policy.

This guide will take you through everything you need to know about homes of the future, smart and secure homes and how future home technology is changing the way that home insurance policies work, as well as the effect on the cost of home insurance.

Does having a home security system reduce homeowners insurance?

Smart home devices such as a security system can reduce the cost of your home insurance. If insurance providers see that you have systems in place such as burglar alarms and CCTV, they may offer you cheaper premiums as they can see that you’re taking every precaution to keep your house safe.

However, it’s not always a guarantee that you can benefit from a cheaper home insurance policy just because you have smart house technology installed in your home. The cost of your home insurance will also depend on factors such as your postcode and the kind of home you live in.

What impact does smart technology have on home buildings and contents insurance?

While there is a definite suggestion that having smart technology installed in your home can decrease the costs of your home buildings and contents insurance, you should be aware that it’s not always a guarantee.

As smart home technology is still a relatively new concept and very few homes in the UK have home automation and smart technology in place, there’s actually very little evidence at the moment to suggest the impact that it has on home and contents insurance.

According to the director of trading for Swinton Insurance, there are claims that people with smart home technology installed in their homes could see a potential saving of around 10% at first. Of course, home insurers will want to see evidence and data that backs up the benefits of having an automated home and whether it increases security or not, so it could still be a little while before there’s an exact figure in place of how much you could save.

Does home insurance cover smart technology in the home?

There are companies such as Neos Smart Home Insurance who offer home insurance policies combined with smart technology. This company actually uses smart home technology in order to protect your home, its contents and the people who live there.

Smart device ownership and home insurance underwriting

How likely an insurer is to pay out on a claim that you make on your policy depends on numerous factors.

Having smart devices installed in your home can certainly help to reduce the cost of your insurance premiums and potentially even make your claim more liable.

However, if you have doors installed in your home that can open automatically even when you’re not at home and a burglar is able to gain access to your home, then it’s highly likely that an insurance company won’t pay out.

Are smart home devices worth it?

Determining whether smart home devices are worth it or not depends on the type of devices you’re looking to purchase.

Some devices can help to save you money in the long run, such as smart thermostats, but it’s important to consider the upfront cost of these types of devices in order to determine whether they’re worth the money or not.

Other smart devices such as video doorbells may also be worth looking into. Not only can they help you to keep an eye on your home when you’re not there and give you peace of mind with regards to its safety, but they can also help save you money and potential disputes when it comes to things like missing packages. You can keep an eye on any deliveries you get, even when you’re not home and a video doorbell is highly likely to deter any potential burglars or thieves if they know that they’re on camera.

Smart door locks may also be worth your investment, especially if you’re prone to forgetting whether you locked your door or not; these types of devices allow you to lock your door through an app or a smart speaker.

Does CCTV bring down home insurance?

Devices such as CCTV have been suggested to bring down the cost of home insurance premiums, but it largely depends on your insurance provider and whether they deem it necessary to offer you a cheaper policy just because you have CCTV in place.

Insurance-approved devices

In order to find out whether your home technology devices are improved by your insurance, you will have to ask your insurance provider. Some companies may have a specific policy in place that covers certain devices, but as it’s still an emerging market, it’s worth checking before you purchase a smart home device.

Smart home technology is ever-changing and always advancing so it can be difficult to stay ahead of the curve and know what’s worth investing in and what devices are just a waste of money.

Before you commit to purchasing any smart home technology, it might be worth consulting your home insurance provider to see if you will even reap any benefits or rewards by purchasing smart home tech.

Of course, many people invest in smart technology such as video doorbells, smart speakers and smart door locks simply just for their own peace of mind and not to get cheaper home insurance, but if you can enjoy the best of both worlds, then it’s definitely worth looking into.

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