What Changes Your Home Insurance Premium?

For a long time now, we have all been filling our homes with gadgets that make our lives easier. Whether these are fridges or security alarms, these devices help us get things done and in some cases, even protect our property. The future of technology is likely to take a huge step forward, however, and this will have an impact on home insurance premiums. We've broke it down for you in this handy infographic

The reason for this is that such premiums are probably going to be worked out in an entirely different way in years to come. And it won’t be change just for the sake of it, but a leap in terms of more accurate coverage as a result of several ground-breaking factors.  Read on to find out more about the connected home and the Internet of Things (IoT), seemingly mind-boggling concepts that we’re all likely to become familiar with in the future.

1. Connected Devices

Looking into the future, it’s clear that our houses will continue to be filled with electronics, but the difference is that they will all have the internet embedded in them. This IoT will allow them all to be connected to you, the user, probably via your smartphone.

A connected home will mean that devices will go well beyond the everyday tasks that they currently carry out. A fridge could let you know when you are low on certain groceries, for example, while heating could be controlled remotely to make it warm ready for when you get home.

2. Big Data

Not only would there be a greater opportunity for devices to act on our behalf, but also to retain a record of a customer’s habits. A person’s behaviour could be more fully understood through the analysis of data collected through a connected device.

With records kept on everything from when devices are used and switched off to when security measures are put in place, such as alarms or locking systems, a better picture of risk would emerge. And all this data could be readily available when it came to working out a premium. 

Not only could the personal data of individuals be used in this way, but also big data from the population as a whole. This bank of information would mean more accurate and targeted cover could be tailored to each person.

3. Consumer Control 

Sensors and information channelled through to a smartphone offers you much more control over your home, allowing you to act accordingly. If there was a burst pipe, for example, damage can be kept to a minimum by dealing with the situation straight away.

It is these kinds of household problems, which if they occur when a homeowner is away, can result in widespread damage to carpets, floorboards and furniture. A notification that allows you to ask a neighbour to go in and contain the leak would mean an insurance claim would be much lower and therefore premiums could be reduced

4. Monitoring systems

As well as being able to do things like turning the heating on before you get home, you’ll also be able to react to emergencies. For example, if you were to leave the hob on, then you would be notified by the device before there was an opportunity for a fire to break out.

The result could be lower premiums, as insurers have the added reassurance that householders have the power to stop damage, including fire and flooding, in their tracks. This would be good news for both the homeowner and the insurer.

5. Cost of Technology

The main mitigating factor in universally lower premiums would likely be the cost of the technology overall. A connected home would be expensive to install and therefore the devices must be covered by insurance.

On top of this, the data stored within your smartphone or sensors would be incredibly valuable, as it would hold the key to finding an accurate insurance product for you. As technology evolves, the areas that need to be protected shift and new challenges arise.

Insurance premiums of the future will benefit from a better ability to predict how properties are used and when risks might occur. Collecting data will mean much of the guesswork is removed from the process of insuring a home.

Take telematics technology, for example, which is being embraced by insurance companies and drivers alike. It uses the track record of an individual’s driving, as opposed to statistics based on a number of factors including age and job title. The future has already arrived for car insurance but is on its way for homeowners.

7. Stock up on food 

By their nature, winter storms are unpredictable. If a storm is bad enough to warrant a status red weather warning, the advice is to stay indoors. Have a stock of nonperishable food to eat like:

  • Tinned meat/fish
  • Tinned veg/soup
  • Pasta
  • Cereal bars
  • Nuts and dried fruit
  • Crackers

8. Alternative way to cook

If you rely on electricity to cook, it might be wise to invest in a gas-powered camping stove to cook during bad weather. Be careful using a camping stove indoors, ensure the area is well ventilated and that the stove is completely turned off after use.

9. Check in on neighbours 

Remember to check in on your neighbours, particularly if they are older. Ensure their home is warm enough and they have enough food to last a few days.

10. Don’t forget pets 

Finally, if you have pets who usually live outdoors or in the garage, consider bringing them inside for the duration of the winter storm, particularly if temperatures drop below 0 or there is a lot of rain forecast.


If you follow these steps you and your home should be as prepared as possible for what is coming this winter. When it comes to protecting your home and the things you love get a home insurance quote from AIG.


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