Essential Install | CEDIA
Connecting Protection
Malcolm Richards , managing director at CEDIA member , Veresure Limited , highlights why many homes with automated technology may not be fully insured under their existing insurance policy and why specialised smart automated insurance is the best protection .
Do smart home need special insurance ?
In a world where the future is being designed around smart home technology , is it enough to mention to your customers that they should contact their home insurer to cover installed products and devices ?
To all intents and purposes , it is good customer service to ensure that they have properly covered their new system in the event of a claim should things go wrong , but it isn ’ t necessarily the best assurance for the home integrator .
In the past , when there was a fault with a product or installation , the home integrator had to return to the project to fix the problem , but they weren ’ t always guaranteed to be paid . As with any product , occasionally things go wrong and it isn ’ t the fault of the installer , yet they may well feel responsible for it .
For this reason , it is important for home technology professionals to have some form of protection against the cost of correcting faults , so that they aren ’ t spending time on projects without getting paid for their time .
We have come across several incidents where home insurers have given the ‘ go ahead ’ for replacement of integrated products in cases where the home was burned to the ground , totally unaware that the reinstatement of the home incorporated home automation where connectivity costs represented an average of 30 % of the replacement spend .
Some homes are not what they may appear on the surface because they have control units and smart technology , hidden wires and wireless networks among other things , resulting in reviewing their offering and increasing their premiums .
Some insurers already charge additional premiums for products notified after the original policy has been taken out . In other cases , the insurer might take a less favourable stance if they are made aware that the property has smart home automation . In short , they do not like connectivity as it poses a high risk , when and if things go wrong , or if there is a major catastrophe in the home .
Currently , contents and buildings insurance cover can leave customers who experience smart technology failure with a shortfall in insurance cover , leaving them exposed to hidden costs .
When you define what a ‘ modern ‘ connected ’ or ‘ smart ’ home is – a home designed around an infrastructure of fixed , low voltage data cables and wireless connectivity – you begin to understand the dilemma facing the home insurance market .
With much of the technology being integrated to provide clever , often one touch operation from anywhere in the world using a smart phone or tablet , the need for specific protection becomes very clear .
We would strongly recommend that home integrators advise customers to alert their insurer that their home is automated . If they do not do so , then their insurer could reduce the amount they pay out for the claim , or , in extreme cases , refuse to meet the claim entirely .
It is time for the insurance industry to look more closely at what impact the growth in smart homes will have on premiums and insurance risks in the future and , more importantly , how they deal with such claims . There are plenty of companies offering cover for smart goods , but this is not the same as connected home technology .
New builds are beginning to include some low end technology and this is expected by new home buyers . What they will receive is a NHBC certificate , but this specifically excludes certain products . Ultimately , insuring the technology within the home is the responsibility of the owner .
The Solution
Smart home insurance needs to protect the whole automation system , including the products , devices , cabling and installation . This will mean that the work that the installer will have to do to fix a fault is always covered . I would suggest recommending a policy that offers the customer the right level of cover to give them the peace of mind they are looking for . Some customers will not have considered the cost of a call-out and the time consumed investigating any fault , in addition there may well be parts required to repair / replace the fault and the integration of those parts . This type of policy will ensure that the home integrator gets paid for time spent on repairs / replacement .
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18 | April 2017 10th-11th May 2017 , Sandown Park , Surrey . Sponsored by