Our homes are getting smarter. We can see who’s ringing our doorbell even when we aren’t home. We can control our shades and lights remotely. We can manage other smart devices, shop, play music and get quick answers using devices like Amazon Echo or Google Home.
These new technologies are amazing and convenient, but as with nearly all new technologies, there is a potential for risk. In this case, insurance risk.
According to IHS Markit, we will have 477 million smart home devices by 2020. In 2016, 80 million smart home devices were shipped, representing a 64 percent increase from the year before. This year is poised to be even bigger, with an estimated 130 million smart home devices expected to be shipped.
Smart homes are the way of the future. For many, they’re already a reality—so we need to consider the insurance risks carefully.
On the bright side, smart homes have many advantages when it comes to insurance. Smart security systems and programmable lights provide important tools against burglary. Devices that detect problems—leaks, for example—will let us handle repairs early on, before the damage gets out of control.
Although smart home devices can come with a hefty price tag, high quality systems can represent a good investment. Devices that decrease risk—such as smart security systems—may even lead to an insurance discount.
Overall, smart homes represent a giant step forward.
There’s still room for caution, though, especially when it comes to the possibility of hackers accessing your smart home devices.
When a device is hacked, the safety features become safety hazards.
Smart home devices are great because they give you control over your home from any location. If hackers gain access to the system, that convenience turns into a nightmare.
Researchers have already shown that this is possible. Cybersecurity experts at the University of Michigan hacked into Samsung’s SmartThings platform. They found security weakness in various apps that let them program lights or make fire alarms go off. They could even eavesdrop on users to learn PINs.
This is not the only platform with potential vulnerabilities. In a Forbes article, Kashmir Hill explains how hacking into people’s homes via a currently discontinued Insteon product proved incredibly easy.
Proceed with caution.
Smart homes offer many advantages, and there’s no reason to avoid the technology completely.
That said, homeowners should research products carefully before making large purchases. Once installed, measures should be taken to ensure that devices are protected from hackers. MarketWatch provides good advice on how to do this, including installing malware protection and changing default usernames and passwords.
As always, make sure to discuss any changes in home security with your Higginbotham agent, and review and adjust your coverage limits annually so your insurance is as smart as your home!