The Future is Smart Homes and They Will Require Smart Insurance

Kristy DonahueCyber Insurance, Home Owners Insurance

A smart home. That sounds so cool and sophisticated.  It also sounds intimidating and potentially complicated. However, chances are you probably already have and are actively using the basic components of a smart house.  “Smart Houses” are simply any residence that utilizes any Internet-connected device to help you, the homeowner, manage and monitor a range of appliances and systems from your mobile devices.  Millions of people have security systems, pet and nanny cams that they view everyday from their phones or iPads every day. Newer and more sophisticated homes can even be instructed to unlock front doors, open garages, run bath water, ignite fireplaces and play music, all from the use of an application on the homeowner’s phone. The future seems fabulous in a fully functional Smart House. In many ways’ homeowners have never felt safer or more secure. However, as with all new security, the downside is that criminals are still lurking out there, trying to figure out how to use this new technology to their benefit.     

Can my smart home be hacked?

Cyber Hacking is a real threat when it comes to Smart Houses. Hackers can potentially hack into a smart home system not only to gain access to your property but also to access electronic information that may be stored on your home electronics. Think about it. The same phone that a home owner is giving instructions to the Smart House on is the same device that most likely carriers applications to the homeowner’s bank accounts, private texts, email accounts and photos. Any of this information could potentially be of value to a criminal. Whether the theft of information leads to a physical robbery, black mail attempt or information hack that is used to steal one’s identity, the expense and distress associated with the hacking of a Smart Home are real.

Many homeowner’s insurance companies are adding Cyber Insurance as additional coverage homeowners can add to their existing policies. While not currently offered by all carriers nor required by all mortgage lenders, experts in the industry agree that this will be the new normal in just a few years. Homeowner’s Cyber Insurance Policies will behave in a similar fashion to Business Cyber Insurance Policies that are already popular on the commercial side of life. Like their commercial policy cousins, personal cyber insurance will cover the policy holder for breaches that took place on their personal devices or Smart Homes. Loss, repair and legal expenses associated with these breaches will be covered.  

Do you currently use Smart House Applications? Do you live in a newly constructed smart home? Do you routinely store personal financial, medical and personal information on your electronic devices? It’s time to start thinking about personal cyber insurance. The future is here. Are you ready for it? 

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