Smart detectors

The world is becoming more connected by the minute and your house is no exception.

Liberty Mutual Insurance is taking what it did for drivers earlier this year and putting a new spin on it for the home. The insurer offers cheaper rates to drivers who install an onboard diagnostic tracker that sends a record of how well or how bad the policyholder's driving is. Now, the company will give discounts to home policyholders who install smart Wi-Fi-connected smoke alarms in their homes.

Smart alarms
Homeowners will save even more money if they give Liberty Mutual wireless access to the alarm once a month to ensure it's working properly, the batteries are changed regularly and the Wi-Fi connection is strong. According to the insurer, the new program, which rolls out this month in six states, is a partnership between Liberty Mutual and smart alarm manufacturer Nest.

Homeowners could save at least 5 percent annually if enrolled in the program, the Boston Globe said.

"These technologies provide the opportunity for consumers to reduce the chance of harm to their family and home by detecting events that trigger alerts on their smart-phones, wherever they may be," said Michael Robon, senior vice president and property product manager for Liberty Mutual.

Fire damage is the costliest claim for insurers. According to the Insurance Information Institute, fire accounted for more than 30 percent of damage claims in 2013 by home insurance policyholders.

A Nest smoke detector would alert homeowners - as well as Liberty Mutual - via smartphone if smoke, fire or carbon monoxide is detected and the device is registered under the insurer's Smart Home program.

"This not only provides better value for our customers, but also enables us to better understand how different technologies may reduce risk for our customers," Robon said.

Personal data
According to insurance industry analysts, online personal data collection is the future when it comes to setting rates for customers.

Using customer information such as a customer's credit scores or school grades to assess their chance of risk is nothing new to the insurance industry. And now with smart alarms, companies will get a clearer picture - knowing which policyholders are keeping their smoke alarms up to date and which aren't.

Need an insurance quote? Check out CoverHound's easy-to-use website for home insurance quotes.

Favorite Articles