Insurers say little data exists to prove that Internet of Things (IoT) can improve home security. Some consumers say, on the other hand, that Internet-connected devices make them feel safer.
Insurance companies have offered lower premiums to homeowners who installed traditional security devices. The question now is if the IoT-enabled security devices will outperform their analog counterparts.
There are insurance firms offering discounts nonetheless for homes with the new smart devices installed, although the reductions are not substantial enough to bring down the average premium.
State Farm Insurance, for example, provides a 15% reduction to homes equipped with certain IoT security systems, on the merit that their installation and effectiveness can be more easily tracked and monitored compared with traditional devices.
American Family Insurance also discounts the cost of Ring Video Doorbells, which have motion sensors, cameras and microphones to let homeowners remotely speak with visitors.
Ring Video Doorbell is the only smart device among more than 100 tested by American Family to be fitting to a home’s security need. Some devices like indoor cameras were judged to be a bad fit due to privacy concerns.
The smart devices still have potential, however. A study conducted jointly by Morgan Stanley and Boston Consulting Group in 2014 estimated smart devices can cut home losses by 40% to 60%.