Insurers may see increased demand from consumers for water leak detection devices. GlobalData’s Insurance Consumer Survey 2018 has found that consumers’ interest in these devices is increasing.
In 2017 only 6.3% of individuals were thinking about adding a water leak device to the household. In 2018 this figure increased to 16.3%, with almost a quarter of those surveyed either using or considering such a device.
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Despite growing interest, the relatively small increase in the percentage of individuals currently using a leak detection device may point towards issues within the insurance industry. One problem is lack of availability: home insurance policies do not typically include the provision of such a device, meaning the customer must bear the cost.
This will naturally reduce uptake – especially given that consumers are unlikely to see any immediate benefit. A second issue could be consumers see little benefit in the form of lower premiums as insurers may not incorporate the devices into their policies.
However, the next 12 months could see this situation change. A number of insurers are investing heavily in water leak detection devices with the aim of incorporating them into their home insurance offerings. Combining this with an increase in customer openness to the use of such a device means the cost of claims relating to escape of water could become less of a pain point.
Leak detection kits and home protection in general is becoming more popular. Even Amazon is getting into the game.
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By GlobalDatamazon’s tie-up with Travelers, which allows consumers to purchase smart home kits alongside insurance, highlights the potential benefits collaborating with those outside the insurance industry can have.
The Amazon Travelers deal will provide Travelers customers in dedicated US states with access to smart home kits that include security cameras, leak detectors, motion sensors, a smart hub, and an Amazon Echo Dot at a discounted price. Eligible customers will also benefit from a discount on their home insurance policy alongside their smart home kit.
Incorporating smart home technology into the household brings clear benefits for both insurers and policyholders. For example, earlier detection of escape of water through the use of leak detection devices could reduce the severity and cost of a claim. Amazon also stands to benefit. As well as providing the company with a new way to reach customers with its own smart products, it may also allow it to become an established provider in the connected home insurance place, potentially enabling it to venture into the insurance market alone.
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