A smart thermostat can turn up the heat in your home before you roll out of bed. A smart speaker can play your favorite podcasts with a voice command. A smart lightbulb can be turned on or off from across the room.
But smart-home devices aren’t just about convenience. Because some of them can help prevent claims, they could also earn you a discount on your home insurance.
Discounts for smart-home devices
To research this story, NerdWallet reached out to a dozen insurance companies. We found that many of them offer discounts to homeowners with smart-home devices designed to prevent water damage, fire or theft. In our research, we found companies advertising homeowners insurance discounts up to 20%, depending on the device and where you live.
Among the companies we surveyed, we saw discounts for a wide variety of devices, including:
- Water leak sensors.
- Fire or smoke alarms.
- Temperature monitoring systems.
- Monitors for your home’s electrical network.
If you already own a smart-home device, ask your carrier whether you can get a discount.
Keep in mind you may need to share data from the devices with your insurer to be eligible for savings.
Below, see how a few major insurers handle discounts for smart-home devices.
Amica
Amica offers discounts for a wide array of smart-home devices. They include smart security devices, temperature monitoring systems, leak detectors and fire alarms. Amica also provides discount codes to use when buying devices from Moen, Flume, Kangaroo and others.
Discounts vary depending on which device(s) you have and where you live. Generally, however, you’ll get the best savings for devices that are online and monitored by a third party.
Cincinnati Insurance
Cincinnati Insurance offers savings of 2% to 8% for automatic water shutoff devices, centrally monitored fire or burglar alarms, temperature sensors, or gas valves that shut off automatically in an earthquake. The company partners with water sensor providers to offer discounts on the purchase of certain smart-home devices.
Farmers
Farmers offers savings of 5% to 20% for smart-home devices that protect against water leaks, fires or theft. Larger discounts generally apply to devices with professional monitoring.
Liberty Mutual
Liberty Mutual policyholders can save up to 10% by installing an approved smart water monitoring device. The company partners with various device providers to offer discounted smart-home technology.
Nationwide
Nationwide offers free smart-home monitoring systems to policyholders in some states. Exact discounts depend on the device and where you live, but the company gives discounts to policyholders with smart-home devices that help prevent theft, fire or water leaks.
Progressive
Progressive Home customers can get discounts for burglar and fire alarm systems. Savings may also be available for centrally monitored security systems and automatic fire sprinklers. An agent can offer more specifics about what’s available in your area.
Progressive also sells home insurance policies from partner companies. Available discounts depend on where you live and which company you’re matched with.
State Farm
State Farm policyholders in most states can sign up for a free Ting device. Ting is a plug-in that monitors your home for electrical problems that could cause fires. The service includes a lifetime $1,000 repair credit that you can put toward fixing any issues Ting finds.
Travelers
Travelers offers discounts for devices like fire alarms, security systems, and water sensors and shutoffs. Savings vary by device and location.
USAA
With USAA’s Connected Home program, you can get a discount for installing at least two water leak detectors from Roost or First Alert and Honeywell Home. You must share usage data from the app with USAA to get the discount. The devices are available to buy through USAA’s website.
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Answer a few questions to see custom quotes and find the right policy for you. Why insurance companies reward smart-home devices
Insurers offer discounts for smart-home devices because they can help catch problems early — before they turn into big claims.
Say you have a smart water sensor next to your water heater, and the appliance springs a leak. The device could sound an audible alarm and send an alert to your phone, enabling you to take immediate action. (Some devices even have an automatic water shut-off feature.)
Without the sensor, you could end up filing a claim, paying a big deductible and having to find contractors to clean up the mess. But with the sensor, the damage might be so limited that you wouldn’t need to make a claim at all.
Should you buy smart-home devices?
The cost of smart-home technology can add up quickly. If you want to invest in a protective device but aren’t sure which ones are worth the money, consider what makes sense for your home.
If your home has older wiring, for example, you might want a device that monitors your electrical system. If you live in a neighborhood with high crime rates, your money might be better spent on a home security system.
Ask your insurer whether the devices you’re considering would qualify you for a discount. Depending on the amount of the discount and the cost of the devices, they might pay for themselves within a few years.
The benefits of smart-home technology could go beyond insurance savings. Having smart-home devices can help give you peace of mind, knowing that you could be alerted before a small problem turns into a bigger one.
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