How Are Smart Sensors Enhancing Home Insurance Models?

By CIOReview | Friday, January 10, 2020

FREMONT, CA: For the insurance industry, digital transformation is not an option but a necessity. Insurance providers are today vying to embrace AI, IoT, and data analytics in the pursuit of the advantages these technologies bring. Home insurance policies are popular among customers across the globe and are now getting revolutionized with the help of smart sensors. Sensors empower insurers and the insured with critical knowledge, which is being used to determine premiums, customize offerings, and expedite claims processing. Additionally, sensor technology is also enabling insurers to mitigate faulty home insurance claims and prevent losses.

For the insurance industry, IoT presents the best way of communicating with the insured. Be it monitoring the homes for signs of possible risks or be it real-time data collection after any accident, IoT allows it all. Smart sensors can detect even the minutest changes in fixtures and convey the same to inhabitants and insurance companies. Thus, with smart sensors, insurance companies can reduce accidents in homes and keep insurance claims low.

Sensors are mostly placed in certain strategic locations. The insurance service providers rely on information provided by the sensors fitted in main doors, electric meters, and water supply pipelines. Sensors on the door can alert inhabitants if someone tries to get in at unlikely hours or when the door is left unlocked. Sensors deployed in electric meters generate data regarding electricity use and generate alerts if there are any anomalies. Water leakage damage is one of the most common reasons for home insurance claims. Thus, sensors that can detect leaks would enable preventive maintenance before significant damage can occur.

Pooling this data enables insurance companies to develop a better understanding of customer behavior and offer personalized products and services. Thus, smart sensors are paving the way for home insurance policies that benefit the insurers, as well as the insured.

See Also: Top Insurtech Startups