How Smart Home Devices Can Save You Money on Insurance

Smart home technology has changed the way people protect, monitor, and manage their homes.

From water-leak sensors that can alert you before a pipe causes major damage to smart security systems that let you monitor your property from your phone, these devices can do more than make everyday life more convenient.

They may also help reduce the likelihood or severity of certain home insurance claims.

And in some cases, homeowners may even qualify for an insurance discount for using eligible smart-home devices.

But how exactly can smart technology affect your homeowners insurance? Which devices can make a difference? And does installing a smart device automatically lower your premium?

Let’s take a closer look.

How Can Smart Home Technology Affect Home Insurance?

Insurance companies are in the business of managing risk. When something reduces the likelihood of a covered loss—or helps detect a problem before it becomes a major loss—it can potentially benefit both the homeowner and the insurance company.

Smart-home devices can help prevent or minimize certain types of damage by providing:

• Early warnings
• Automatic shutoffs
• Remote monitoring
• Security alerts
• Smoke and fire detection
• Water-leak detection
• Temperature monitoring

For example, a small water leak that goes unnoticed for several days could potentially cause extensive damage to floors, walls, cabinets, and personal property. A smart water sensor may alert you to the leak shortly after it begins, giving you an opportunity to address the problem before the damage becomes more extensive. That kind of prevention can be valuable—not just for your insurance company, but for you as a homeowner.

Can Smart Home Devices Actually Lower Your Insurance Premium? They can, but not always.

Some insurance companies offer discounts or incentives for certain eligible smart-home devices or monitoring services. However, discounts vary significantly between insurance carriers and policies.

The device may need to:

• Meet specific eligibility requirements
• Be professionally monitored
• Be installed correctly
• Be connected to an approved monitoring service
• Be registered with your insurance company
• Meet specific technology or certification standards

Simply purchasing a smart device and installing it yourself doesn’t necessarily mean you’ll receive an insurance discount.

Before buying a device specifically for insurance savings, check with your insurance professional to determine whether your carrier offers a discount and which devices qualify.

Smart Water Leak Detectors

Water damage is one of the most common types of homeowners insurance claims, which makes water-detection technology particularly useful.

Smart water sensors can detect moisture and alert you when they identify a potential leak.

Some systems can even monitor water flow and automatically shut off your home’s water supply when unusual activity is detected.

Why Does This Matter?

Imagine you’re away from home for the weekend.

A pipe begins leaking underneath your kitchen sink.

Without a detection system, the leak could continue for hours—or even days—before anyone notices.

With a smart water sensor, you could receive an alert on your phone shortly after the leak is detected.

Some systems can even automatically shut off the water.

That can potentially help prevent a small plumbing problem from becoming a major water-loss claim.

Smart water devices may help detect:

• Leaking pipes
• Appliance leaks
• Water heater leaks
• Washing machine leaks
• Dishwasher leaks
• Frozen pipes
• Unusual water flow

Even when an insurance discount isn’t available, the potential loss-prevention benefits can make these devices worth considering.

Smart Smoke Detectors & Fire Alarms

Smoke detectors are already an essential part of home safety. Smart smoke and fire detection systems take that protection a step further by providing alerts and additional monitoring capabilities.

Depending on the device, a smart smoke detector may send an alert directly to your smartphone when smoke or fire is detected. Some systems may also connect to professional monitoring services. This can be especially valuable when you’re away from home.

Why Smart Fire Detection Matters for Insurance

Fire can cause devastating damage in a very short amount of time.

Early detection may give you and emergency responders more time to react.

Some insurance companies may offer discounts for qualifying fire-protection systems, particularly monitored systems.

However, eligibility varies by carrier, so check with your insurance agent before assuming your system qualifies.

Smart Security Systems

Home security systems can help protect against burglary, theft, and other security concerns.

Today’s smart security technology can include:

• Door and window sensors
• Motion detectors
• Smart locks
• Video doorbells
• Security cameras
• Glass-break sensors
• Alarm systems
• Professional monitoring

Many systems allow homeowners to monitor their property remotely through a smartphone app. If a door opens unexpectedly, you may receive an immediate notification. If your security system is professionally monitored, the monitoring service may also be able to respond to certain alarm events.

Can a Security System Lower Your Homeowners Insurance? Potentially.

Some insurance carriers offer discounts for qualifying burglar alarms, security systems, or professionally monitored systems.

But again, not every system qualifies.

A basic camera purchased online may provide valuable security for your home, but your insurance company may have specific requirements before offering a discount.

For example, the carrier may distinguish between:

• Self-monitored systems
• Professionally monitored systems
• Centrally monitored alarm systems
• Security cameras
• Doorbell cameras
• Alarm systems with specific certifications

Before purchasing a system, ask your insurance professional what qualifies for your policy.

Smart Thermostats & Temperature Sensors

Smart thermostats are primarily known for helping homeowners manage energy use, but certain temperature-monitoring devices can also help identify potentially damaging conditions.

For example, a smart temperature sensor may alert you if the temperature inside your home drops significantly. This can be particularly useful during periods of extreme cold when pipes may be at risk of freezing.

Some systems can also monitor:

• Indoor temperature
• Humidity
• HVAC performance
• Power outages
• Unusual temperature changes

While a smart thermostat isn’t automatically an insurance discount, the ability to monitor conditions inside your home may help reduce certain risks.

Smart Doorbells & Security Cameras

Video doorbells and security cameras have become increasingly popular. They can allow homeowners to see who’s approaching the property, receive motion alerts, and monitor activity remotely. They can also provide useful documentation if an incident occurs around the home.

For example, security footage could potentially help document:

• Package theft
• Property damage
• Trespassing
• Suspicious activity
• Vehicle incidents
• Other events occurring on the property

Whether a camera or video doorbell qualifies for an insurance discount depends on the insurance carrier and policy.

Smart Locks allow homeowners to lock and unlock doors electronically, often using a smartphone, keypad, or other authentication method. They can send notifications when doors are locked or unlocked. They can also allow homeowners to provide temporary access codes to family members, guests, or service providers without giving them a physical key.

While smart locks can improve convenience and security, they aren’t automatically eligible for insurance discounts.

Always check with your insurance company before assuming a particular device qualifies.

Smart Home Technology Can Help Even When There Isn’t a Discount

Here’s something important to remember:

The value of smart-home technology isn’t limited to an insurance discount.

Suppose your insurance company doesn’t offer a discount for your smart water sensor.

That device could still potentially save you thousands of dollars by alerting you to a leak before extensive damage occurs.

In other words, there are two different ways smart-home technology can potentially save you money:

1. Insurance Discounts

Your insurance company may offer a discount for qualifying protective devices.

2. Loss Prevention

The device may help prevent or reduce the severity of a covered loss in the first place.

The second benefit can potentially be much more valuable than the discount itself.

How Much Can Smart Home Devices Save You?

There’s no universal answer.

Insurance discounts vary by:

• Insurance carrier
• State
• Policy
• Type of device
• Monitoring service
• Home characteristics
• Eligibility requirements
• Other underwriting factors

Some carriers may offer discounts for qualifying protective devices, while others may not.

Even when a discount is available, the amount may vary.

That’s why it’s important to ask your insurance professional before purchasing a device specifically for an insurance discount.

Don’t Buy a Smart Device Just for the Discount

A common mistake is buying an expensive smart-home system because someone said it will “save money on insurance.”

That’s not necessarily how it works.

Imagine you spend $1,000 on a security system and receive a relatively small insurance discount. It could take years for the premium savings to offset the cost of the system.

Instead, think about the overall value.

Ask yourself:

• Does this device make my home safer?
• Can it help prevent a major loss?
• Does it provide monitoring while I’m away?
• Will I actually use the technology?
• Does my insurance company recognize the device?
• Is professional monitoring required?
• How much is the potential insurance discount?
• Are there installation or monthly monitoring costs?

A smart device should ideally provide value beyond the insurance discount.

Smart Home Devices to Consider

If you’re looking for ways to make your home safer and potentially qualify for insurance savings, consider discussing these technologies with your insurance professional:

💧 Water Protection

• Smart water leak sensors
• Automatic water shutoff systems
• Water flow monitors
• Freeze sensors

🔥 Fire Protection

• Smart smoke detectors
• Heat detectors
• Professionally monitored fire alarms
• Smart carbon monoxide detectors

🏠 Security

• Professionally monitored alarm systems
• Smart door and window sensors
• Motion detectors
• Video doorbells
• Security cameras
• Smart locks

🌡️ Environmental Monitoring

• Temperature sensors
• Humidity monitors
• Freeze sensors
• Smart HVAC monitoring

Not every device will qualify for an insurance discount, but many can provide useful risk-management benefits.

Smart Home Devices & Homeowners Insurance: What to Ask Your Agent

Before purchasing a device, consider asking your insurance professional:

• Does my insurance company offer a smart-home or protective-device discount?
• Which devices qualify?
• Does the device need professional monitoring?
• Does the device need to be professionally installed?
• Do I need to provide proof of installation or monitoring?
• How much could my premium potentially change?
• Does my policy have any other requirements?

These questions can help you determine whether a particular device is worth the investment.

Keep Your Insurance Company Updated

If you install a new security system, fire alarm, water shutoff system, or other qualifying protective device, let your insurance professional know. Don’t assume the insurance company will automatically know about the upgrade.

You may need to provide documentation, installation information, monitoring details, or other proof before a discount can be applied.

And remember: discount eligibility is determined by the insurance carrier and policy—not simply by owning a smart device.

Smart Home Technology Is Only One Piece of the Puzzle

While technology can help make your home safer, it shouldn’t replace good insurance coverage.

Smart devices can malfunction.

Batteries can die.

Internet connections can fail.

A camera can’t prevent every theft.

A water sensor can’t eliminate every plumbing problem.

And a smoke detector doesn’t eliminate the possibility of a fire.

Smart-home technology and insurance work best together.

The technology can help with prevention and early detection, while insurance can provide financial protection for covered losses that still occur.

Smart Home Insurance Checklist

Thinking about upgrading your home with smart technology?

Use this checklist:

• Ask your insurance professional whether smart-home discounts are available
• Find out which devices qualify
• Ask whether professional monitoring is required
• Ask whether professional installation is required
• Consider a smart water-leak detection system
• Consider an automatic water shutoff system
• Review your smoke and fire detection systems
• Consider a professionally monitored security system
• Consider smart door and window sensors
• Consider a video doorbell or security camera
• Consider freeze and temperature sensors
• Provide documentation of qualifying devices to your insurance company
• Review your homeowners policy regularly
• Don’t rely on smart technology as a substitute for appropriate insurance coverage

The Bottom Line

Smart-home technology isn’t just about asking your thermostat to turn down the temperature or checking your front door from your phone.

The right devices can help homeowners identify problems earlier, prevent certain losses, and potentially qualify for insurance discounts.

From water-leak sensors and automatic shutoff systems to monitored security systems and smart fire detection, technology can be an important part of a broader home-protection strategy.

But remember: not every smart device qualifies for an insurance discount, and discounts vary by insurance company and policy.

Before purchasing a device specifically to save money on homeowners insurance, talk with your insurance professional.

Want to Find Out If Your Smart Home Qualifies for a Discount?

Already have a smart security system or water protection device—or thinking about installing one?

Our insurance professionals can help you review your homeowners policy and determine whether your insurance carrier offers discounts for qualifying protective devices.

We can also review your overall coverage to make sure your home is properly protected.

Contact our agency today for a homeowners insurance review.

Your smart home can help protect your home from the unexpected. The right insurance coverage can help protect you financially when the unexpected happens.

This article is intended for general informational purposes only and does not constitute insurance advice. Smart-home discounts, eligibility requirements, qualifying devices, monitoring requirements, and savings vary by insurance company, policy, state, and individual circumstances. A smart-home device does not guarantee prevention of a loss or eligibility for an insurance discount. Please consult with your insurance professional regarding your specific policy. This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.