Consumers are not aware of the cost saving benefits of these devices
The Importance of Insurers in Smart Home Tech Adoption -- In an era driven by technology, the term 'smart' has become synonymous with convenience, efficiency, and safety.
However, despite the proliferation of smart devices in various aspects of our lives, there's still a significant gap in awareness when it comes to certain smart home tech products, particularly water and fire sensors. These unsung heroes of home safety have the potential to minimize or even prevent significant losses, yet most Americans remain in the dark about their benefits.
Jeff Wilcoxon, the Vice President of Strategic Partnerships at Nationwide, sheds light on this knowledge gap. He points out that consumers often lack awareness of devices like water and fire sensors because they don't actively consider the types of incidents these devices guard against. The preventive aspect of these technologies often goes unnoticed until a loss event occurs, and people realize the importance of safeguarding their homes.
Wilcoxon's insights, shared during an interview with Insurance Business, underscore the critical need for raising awareness about these smart home tech products and the opportunities they present in the current economic climate. He also delves into Nationwide's partnership with Resideo, a smart home tech company, and the role of brokers in bridging this awareness gap.
Building Consumer Trust through Awareness
A recent Nationwide study examined Americans' awareness and adoption of smart home tech. Surprisingly, a significant number of respondents own smart video doorbells and smart home security cameras, demonstrating a growing interest in home security. The top priority for homeowners, whether they own these devices or not, is to make their homes safer and more protected.
Brokers play a pivotal role in recommending smart devices to insureds. The most recommended devices include smart sensors for carbon monoxide detection and smart locks for doors. However, some devices, such as smart water sensors for monitoring flow and leaks, remain lower on the list, despite their potential to prevent substantial water damage.
Wilcoxon highlights the startling statistic that only 9% of respondents use smart water sensors, even though the average cost of water damage is a staggering $12,514. Similarly, electrical fire hazards, despite being a significant risk, have an adoption rate of just 48%. The average fire claim amounts to around $83,000, making these devices a cost-effective investment.
Brokers can recommend these devices not only to reduce potential losses but also to build consumer trust and retention. As economic uncertainty prompts homeowners to seek cost-effective insurance options and better risk management, brokers can position themselves as value-oriented advisors.
Initiating Conversations with Consumers
Smart home tech is still in its early days, akin to the early stages of telematics in the auto insurance industry four years ago. Although these devices have made significant progress, they remain an underutilized resource.
Brokers can initiate conversations by discussing the smart devices already installed in a client's home and presenting available options in the market. Data and analytics can be valuable tools to inform clients about potential threats to their homes and the financial consequences of these threats.
Wilcoxon emphasizes the goal of bringing peace of mind to customers while providing opportunities to save money. The ability to offer personalized solutions aligns with the core mission of insurers: to protect and empower their clients.
A Forthcoming Partnership
Nationwide's commitment to smart home solutions is further underscored by its partnership with Resideo. Resideo, a sibling company to Honeywell established in 2018, specializes in providing smart home devices and systems. This partnership aims to make these technologies more accessible to homeowners.
The collaboration intends to offer a range of packages and bundling options that not only protect homeowners from high-frequency perils but also introduce newer devices into households. The goal is to provide packages that cater to the majority of customers' needs, with the flexibility to adapt to evolving consumer demand and concerns over time.
In 2024, these packages are expected to hit the market, signaling a significant step toward enhancing home safety and awareness about the potential of smart home tech products.
The path to safer homes involves more than just insurance policies. It requires awareness, education, and action. Insurers and brokers are increasingly recognizing the value of certain smart home tech products in preventing losses and promoting safer living.
Raising awareness about the benefits of these devices can not only protect homes but also build trust and create a safer and more secure environment for homeowners. As we move further into the age of smart living, these essential devices are poised to play a crucial role in safeguarding our homes and possessions.
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