Smart technology is very quickly changing how we live. By utilising technology like voice recognition, connected devices, and AI personal assistants, homes are turning into the smart households once only found in science fiction.
As homes get more technologically advanced so too does the risk of damage and theft and the need for a new type of insurance.
Yet, smart homes have presented a challenge to insurance companies as much of the technology is already designed to protect itself from damage, and in some cases even theft.
Internet of Things’s Mitchell Klein lists the different ways smart devices can protect a home, from water management apps that allow users to turn off the water source from their phone, to smart locks that alert the police when tampered with. Klein writes that this has led to insurers offering premiums for homes protected by smart technology, and even offering their own smart technology services.
Neros is one such insurance company that provide a smart security system that is linked to a home insurance plan. The smart home tech includes cameras, motion sensors, and smoke detectors, all of which can be controlled by a smart home management app. This type of insurance is likely to become even more common as more and more UK households upgrade to smart homes. Statistica reports that the number of UK homes using smart technology for energy management alone is around 3.05 million, and is projected to more than double by 2023. The revenue for this market is expected to have an annual growth rate of approximately 16.6%.
This market expansion can be seen happening across the UK. Last year, Sommer Place in Milton Keys became the location of the UK’s first affordable smart homes with a starting price of £250,000. The homes all included Apple HomeKit, which was already installed by the time the owners moved in. This year, the prices will increase slightly to reflect the market.
The housing market in the UK has experienced a boost in housing prices this year with the Halifax Price Index (3m/YoY) on the FXCM economic calendar showing an increase of 2.8%. The reason for this is that there has been a shortage of properties on the market. Managing Director at Halifax Russell Galley believes that the market is still resilient, as the average number of sales in January was still over 100,000 which is consistent with the five year average. As buyer-ready smart homes become more common and available, expect further shifts in the market in the upcoming years with the prices of these homes dropping. This in turn will have a positive knock-on effect for the home insurance industry.
Smart homes are undoubtedly the future and one cannot be blamed for wanting to keep up. The good news is that introducing smart technology does not have to be a daunting task, as long as you do your research and allot ample time beforehand. You just need to plan six month ahead, as we’ve discussed in an article here on Emerald Life.
Even those who are sceptical about technology can take advantage of the wide range of insurance options available to put their minds at ease. Especially as many companies now offer a service for dealing with smart homes.