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December 7, 2017

Insuring Smart Home Technology: Is Your Contents Coverage Enough?

Insuring Smart Home Technology: Is Your Contents Coverage Enough?

Homes can do so much more today than ever before. Not only do they provide a safe place to live, but they interact with people.

Smart technology is providing many benefits for homeowners nowadays. It can control home security and energy systems. It can control lighting. Some systems even answer random questions. However, this high-tech update to a home comes at a price. Many systems are very valuable. Homeowners insurance can cover these items, in some cases.

What Are the Risks?

Let’s say a home’s smart thermostat stops working because a fire occurs. That system may cost several thousands of dollars to replace. In this situation, proper home insurance might help the homeowner recover that investment. Without an updated policy that notes the smart system, though, the coverage may not be enough. Here’s what to do:

Determine the Value of Any Smart Home System You Have

Like any collectibles, fine art, or jewelry, know the value of all of your tech. Add up the value and gain proof of this value. Collect receipts, for example, when making purchases. Hold onto these. Know the value of your home’s contents in general. The more you own, the more insurance you need.

Take a Look at Your Home Insurance Policy

Next, look at your existing home insurance policy. Most plans provide contents coverage for all items stored within the home. In the case of a fire, the contents insurance usually covers 10 percent of the policy’s value. What is 10 percent of your policy’s maximum value?

If this is under the value of your home’s current contents, including the smart home technology, consider making adjustments. However, if the coverage is enough to help you replace your belongings, you may not need more.

How to Update Your Policy

Speak to your home insurance agent. Let the agent know the types of high-valued items you have. Sometimes, some forms of smart home tech can reduce your insurance costs, too. Then, consider a rider or an endorsement. This is an addition to the existing policy. It covers specific items. It can cover your smart technology. Most often, it is affordable.

Don’t assume your assets receive automatic coverage. Instead, update your policy. Be sure it reflects everything you own. Update your coverage to ensure it protects your assets so you can recover after a significant loss. You don’t want to be stuck with excessive costs because you don’t have enough coverage. For more information on homeowners insurance, explore our website.

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