And according to AccuWeather, scientists already have their eye on next year, with the National Hurricane Center debating whether they should move up the official start of hurricane season with storms now forming earlier than ever.
This is an alarming trend not only for those living along the coast and surrounding areas, but their insurance carriers too. Meanwhile, surging premiums aren’t making it any easier for homeowners to protect their properties from these threats. Take a look at Florida where the Insurance Information Institute estimates that the average premium will hit $4,231 this year, up 33% from last year and nearly 70% from 2020. And The Wall Street Journal reports that fraudulent roof claims and litigation have only made matters worse, keeping some from getting insurance at all. All this begs the question, how can carriers make homeowners insurance more affordable and accessible?
Enter smart home tech.
Tackling water risk
While hurricane-prone areas serve as a prime example, this issue is much larger. Water damage is a real threat for anyone living on the coast, near rivers or other water sources. In June, Eastern Kentucky was rocked by record flooding along the Kentucky River. Water rushed into surrounding communities devastating homes and businesses. This issue even extends to urban areas that can become inundated with water during massive rainstorms, like in Providence, Rhode Island where nearly 10 inches of rain recently fell in just 24 hours, leading to flash flooding and even submerging a major highway.
That’s why so many carriers have already turned to smart home tech to help make homeowners insurance more affordable and more accessible to those in need. Devices like smart sensors, remote water shut-off valves and cameras that can send alerts and be controlled via a smartphone are enabling homeowners to proactively monitor their properties and act when the first signs of trouble arise. That’s why more and more carriers are offering smart home programs to get this technology to policyholders, especially in hurricane-prone areas.
By getting smart home tech into their homes, carriers are helping customers get hands on when it comes to monitoring and protecting their properties. While insurance has historically been a very reactive industry, technology is changing the game. The goal is that by doing so, homeowners will spot signs of water damage like a leaky roof, rising flood waters or a burst pipe before it becomes a costly insurance claim worth thousands of dollars. It has been proven that smart home tech helps carriers with customer acquisition and retention and increases customer engagement which typically only happens at the time of renewal or when filing a claim (not always the most pleasant experience for policyholders).
Making insurance more affordable
The big question is, how can carriers afford to offer this technology while making premiums more affordable in the process? First, by getting smart home tech into customer homes, carriers are differentiating their offerings and creating new reasons for homeowners to become their customers. The goal of insurtech products is to help catch problems before they become messy clean-ups, costly insurance claims and lengthy repair headaches. By putting these products in the hands of homeowners, carriers are actively working to reduce the number of claims by empowering homeowners to act at the first sign of trouble.
For homeowners, this can equal big savings. Many homeowners receive smart home devices for free or heavily discounted from their insurer by opting into smart home programs. Because of this, carriers often offer premium discounts (up to 15% in some cases) just for activating their smart home tech. This is giving homeowners in water prone areas a chance to save on their insurance, especially in places like Florida where costs continue to mount. At the same time, by activating their devices like a water sensor for example, carriers know that homeowners in areas prone to flooding and water damage are actively taking steps to reduce risk – and that’s a win-win situation in the eyes of an insurer.
Living in an area prone to hurricanes and other water related events already creates enough challenges for homeowners. Getting homeowners insurance at an affordable rate doesn’t have to be one of them. By working with smart home tech and making it available to homeowners in these scenarios, carriers will not only boost the value of their policies, but also empower homeowners to take proactive steps to keep properties safe and avoid costly claims.
