Smart Devices and Your Homeowners Insurance: What to Know

Smart home devices have quickly become part of everyday life. From thermostats that adjust based on your habits to sensors that alert you to water leaks, today’s connected technology offers homeowners more visibility and control than ever before.

But what role does smart home tech play in your insurance coverage, and how can it help you reduce risk?

In this article, we dive into the Internet of Things, how these smart devices can reduce insurance risks and help lower costs, and offer advice for what to consider before plugging in for the first time.

What Is Smart Home Technology?

Smart home technology refers to internet-connected devices that monitor, automate, or control systems and appliances in your home. These tools range from simple plug-in devices to fully integrated home systems, and while they’re often marketed for convenience, they can also play an important role in home protection.

Today’s smart home devices can:

• Detect leaks or unusual moisture levels and send alerts before a pipe bursts or a water heater fails.
• Monitor for smoke, heat, or carbon monoxide and notify you immediately—even when you’re not home.
• Record motion, capture video, or provide entry logs, which can help document activity around your property in the event of theft or vandalism.
• Regulate temperature and lighting, helping prevent energy waste and reducing fire risks tied to overheating systems or unattended appliances.

These capabilities can provide homeowners with early warning signs of potential problems, allowing faster intervention and, in some cases, helping to reduce the severity of loss. While no device can eliminate risk entirely, they can serve as a valuable tool in your overall risk management approach and may complement the protection offered by your homeowners policy.

How Smart Devices Can Support Your Insurance Strategy

When used appropriately, smart home devices may help reduce the likelihood or severity of a covered loss, particularly for common claims like water damage, fire, or theft. 

That’s why many insurance companies, including Central, recognize the potential of these tools as part of a broader risk management strategy.

Risk Mitigation

Smart devices can help identify issues early. For instance:

• Water leak detectors can alert you to a pipe issue before it leads to significant damage.
• Smart smoke detectors can provide faster notification of a potential fire, even when you’re not home.
• Video surveillance tools can assist in documenting and reporting theft or vandalism.

Early detection doesn’t prevent all losses, but it may help reduce damage in some situations, which can lead to a more efficient claims process.

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Potential for Policy Savings

Some insurance carriers offer discounts for installing certain approved smart devices in your home. These discounts vary by device type and eligibility requirements, and not all systems will qualify. Your independent agent can help determine what may apply to your policy.

What to Consider Before Installing Smart Tech

While smart home tools offer valuable benefits, it’s important to understand the limitations and responsibilities that come with them. Here, we break down some of the most common factors to consider when layering smart tech into your home maintenance and loss prevention plans. 

Consideration	What to Know
Device reliability	Most systems rely on electricity, batteries, and Wi-Fi. If any of these fail, the device may stop functioning.
Cybersecurity	Any device connected to your home network can introduce vulnerabilities. Be sure to use strong passwords and update firmware regularly.
Cost and upkeep	Some systems may involve up-front equipment costs, ongoing subscriptions, or maintenance needs. Factor this into your planning.
Data use	Certain incentive programs may require sharing data with the device manufacturer or service provider. Be sure to review those terms carefully.

Considering Investing in Smart Tech For Your Home? Talk to Your Agent First

Smart home technology can be a useful tool in protecting your property, but it’s not a substitute for proper insurance coverage. If you’re considering adding connected devices to your home, or if you already have them installed, talk with your independent Central agent. They can:

• Help you understand how your devices may impact your policy
• Identify any discounts or endorsements that may apply
• Recommend risk management strategies to further protect your home

The Bottom Line

Smart devices offer more than just convenience—they can help support safer, more efficient homes when used responsibly. At Central, we believe in providing the tools and support you need to make informed decisions about your protection.

Questions about how your smart home setup fits into your coverage? Reach out to your Central agent to schedule a policy review today.