What does Smart Home Have to do with Insurance? Everything.

Home insurance is a necessity, but the purchasing experience could be improved to make it more enjoyable for homeowners. Currently when shopping for insurance, homeowners start with quotes from big-name companies and make their selection based on rates and coverage. But an insurance policy should be chosen for more than its rates: homeowners should consider the coverage, services, and the policy provided. Insurers should be a partner for homeowners and communication should occur more often than just when a disaster strikes. InsurTech changes the insurance purchasing journey as a new, proactive, service-focused relationship between homeowners and insurers emerges.

Homeowners insurance will converge with other home services and technologies, such as smart home devices, virtual inspections, and robotic maintenance to create regular and positive engagement between insurer and homeowner. A partnership can support homeowners in the protection and care that is especially needed for new and young home buyers who may not be prepared for the maintenance and management that a house requires. Insurers can become a guiding partner for navigating home care, for example, by offering service packages for home inspections, maintenance schedules or consultations, connections with plumbers, electricians, and other professionals. It could also offer smart home devices and sensors to help secure and protect the property.

Expanded service offerings can differentiate insurers by providing new and unique value that appeals to the priorities and needs of customers. In the smart home example, insurers can partner with homeowners in proactive protection with water and smoke detectors that could prevent or lessen damage — in turn, reducing claims for the insurer and aggravation for the homeowner. This enhanced relationship could affect a buyer’s purchasing journey, where those already interested in a smart home solution like water sensors could connect to the insurer through a partnership with the device manufacturer and those who need maintenance or home care help would look for a provider based on their programs.

A service or technology-led approach is quite different than the experience now as homeowners are focused on the coverage and rates of insurers. These opportunities for new services will open continued opportunities for insurers to connect with new customers; for example, those offering home technology packages could up sell new product, like devices for winter or a flood season. Or, those offering inspections and maintenance programs could offer a similar seasonal program or safety check-in on home products such as locks, smoke detectors, plumbing, heaters, and more.

Customer experience will be paramount in a new homeowner-insurer rapport with more regular communication. As a partner in their home care and protection, monthly or quarterly interactions for service and support should become the new gold standard. The customer service experience must be great, or homeowners will look for another insurer. An ongoing supportive homeowner-insurer relationship focused on prevention and maintenance can benefit both parties: Homeowners benefit from gaining a resource who can guide them in the support they need for home care, while insurers benefit by preventing or lessening damage that could result in a claim.