Insurance companies, meet the Internet of Things. Two major insurance companies are now offering incentives to customers who outfit their homes with the Nest Protect smart smoke detector. I'm actually surprised it took this long for home insurers to match up with smart gadgets, because it seems like a match made in heaven.
Both Liberty Mutual Insurance and American Family Insurance have partnered with Nest to provide subsidized smoke alarms to customers. Customers will be able to get their hands on the $99 Protect free of charge and could also be eligible for monthly discounts on their bill. It's an obvious win for customers, but what's the upside for insurance companies?
This is great for the insurance company since smoke detectors help reduce the damage done by fires, and can lower the insurance payouts. It’s akin to the discounts that home insurance providers offer for people who install security systems.
Right now, American Family is only offering the program to customers in Minnesota. The company has also said that customers using non-Nest smart security gadgets could also be eligible for a 5% discount on their bill.
In order to qualify for the Nest discounts, you have to sacrifice some privacy and share information from your Nest Protect with your insurance company. After all, the company isn't going to give you a discount if it can't verify that the smoke alarms are actually installed and working in your home.
The insurer will send the customer the Protect (which costs $99) at no cost, and the customer hooks the Protect up via the ‘Works with Nest’ program. That will enable the Protect to share some data with the insurance firm so it knows if the customer’s house has working smoke detectors.
The Protect will share data once every month with the insurer. That data includes your ZIP code, the names of the rooms where the sensors are located and whether or not the sensors are working.