Have you noticed your homeowners insurance bill creeping up every year? You’re not alone. In 2025, homeowners insurance costs were up by about 21% on average, with premiums rising faster than inflation.
But what if you could make your home safer, prevent expensive damage, and earn discounts of up to 20% on your premium? Smart home devices, from security systems and smoke detectors to leak sensors and thermostats, aren’t just convenient gadgets; they’re preventive tools that many insurance companies love. This guide will show you which devices qualify for discounts, how much you could save and why insurers reward homeowners who embrace technology.
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Why Insurers Reward Smart Tech
Insurance is all about assessing and managing risk. When you reduce the likelihood of making costly claims, your insurer has more money to work with. There’s a simple formula behind smart‑home insurance discounts: less risk equals fewer claims, which leads to lower premiums for you.
The rise of connected devices is also creating a data‑rich environment that benefits both homeowners and insurers. By the end of 2025, over 57% of U.S. households are expected to own at least one smart home device, and the global smart‑home market was valued at $127.67 billion in 2024 with an eye‑popping forecast of $1.4 trillion by 2033.
Security cameras and video doorbells are particularly popular. In 2025, 38% of U.S. homes had smart security cameras, 33% used video doorbells and 24% subscribed to cloud video services. This adoption isn’t just about convenience; it reflects a shift in consumer attitudes. Surveys show that 9% of households mention insurance discounts as a reason to adopt smart devices.
Some insurance companies advertise homeowners discounts up to 20 %, while industry watchers say typical discounts range between 5% and 20%. Discounts are based on measurable reductions in risk. Consider these examples:
- Fire detection – Smart smoke and carbon‑monoxide detectors not only sound alarms but also send alerts to your phone or monitoring service. Early notification can prevent small incidents from becoming catastrophic fires.
- Water leak alerts – Water damage is one of the most frequent and expensive home‑insurance claims. Leak‑detection sensors monitor moisture around washing machines, water heaters and pipes. Automatic shut‑off valves can stop leaks before they flood a basement.
- Break‑in deterrence – Video doorbells, motion sensors and smart locks make your home less attractive to thieves. Some systems allow you to lock or unlock doors remotely and receive real‑time alerts if someone tries to break in.
Each of these devices helps catch problems early or prevent them altogether. That proactive risk reduction is why your insurer may offer discounts and why major carriers are creating “connected home” programs that partner with device manufacturers. Many companies will provide either a connected home or smart home discount if you install qualified devices.
Smart Devices That Could Save You Money
Not all gadgets will earn you a discount, and not all discounts are the same. Here’s a breakdown of the devices insurers tend to reward, along with tips on how to maximize both protection and savings.
Smart Security Systems
Traditional alarm systems have long earned small premium credits, but modern smart security systems go beyond a blaring siren. They integrate cameras, motion detectors, door and window sensors, and professional monitoring to create a layered defense. Installing a monitored alarm system can reduce your premium by about 5% to 10%. Some carriers cap the savings for simple DIY setups at around 5%, while fully monitored systems may earn up to 15%.
- Alarm system with monitoring – To qualify for higher discounts, most insurers require professional monitoring. That means if a sensor triggers, a call center contacts you and dispatches emergency services if needed. The system should have battery backups and cellular communication, so alerts still go out during power or internet outages.
- Smart locks and video doorbells – While locks and doorbells alone may not qualify you for a discount, they can be part of a security package. Doorbells deter porch pirates and provide proof if a break‑in occurs. Smart locks allow you to generate temporary codes for guests or contractors and track when doors are opened, and by whom.
If your annual premium is $2,397 and your insurer offers a 10% monitored security discount, you could save roughly $240 a year (10 % of $2,397).
Water Leak & Freeze Sensors
Water damage claims can easily exceed tens of thousands of dollars. Smart leak sensors and automatic shut‑off valves are becoming popular because they prevent small drips from turning into indoor waterfalls. Some insurers structure discounts by device capability. For example, a company may offer 5% off for basic leak alerts, 10% for sensors that also provide automatic shut‑off and 15% for systems with multiple leak sensors and professional monitoring.
- Detect leaks early – Place sensors near water heaters, under sinks, behind washing machines and around HVAC condensate pans. Connect them to your home Wi‑Fi or hub so you receive instant smartphone alerts. Some systems integrate with a smart water valve that automatically shuts off water when a major leak is detected.
- Freeze sensors – In colder climates, freeze sensors measure temperature around plumbing. If pipes drop near freezing, the system alerts you so you can raise the thermostat or insulate vulnerable areas. Frozen pipes that burst are among the costliest homeowner claims.
- Insurance programs – Certain insurers require you to install a minimum number of leak sensors (often two or more) and provide proof of purchase and installation to qualify for a discount. Check the fine print; discounts may be contingent on maintaining the system and verifying its operation during annual reviews.
Smart Electrical Monitoring Devices
Many house fires are caused by an electrical malfunction in wiring or appliances and can go undetected by the homeowner. Such fires are hidden originating from arc faults in wiring or connected devices that can result in the destruction of the home, bodily injury and even death.
Electrical monitoring devices can pinpoint and identify unique signals generated by tiny electrical arcs and send you an alert. These signals are incredibly small but can lead to a catastrophic fire if undetected.
Smart Smoke & CO Detectors
Smart smoke detectors go beyond basic ionization or photoelectric models. They provide real‑time notifications, voice alerts and automatic integration with emergency services. These features help reduce response times, which can mean the difference between a kitchen flare‑up and a whole‑house blaze. Most carriers include smart detectors under their protective device discount category; savings typically range from 2% to 10%, depending on whether your system is monitored.
- Instant alerts, even when away – Whether you’re at work or on vacation, smart detectors send notifications to your phone when they detect smoke or carbon monoxide. Some models tell you what kind of alarm is sounding (smoke vs. CO) and which room it’s in.
- Integration with emergency services – When connected to a professional monitoring service, smart detectors can automatically contact the fire department, reducing response times.
Smart Thermostats
While thermostats alone don’t always yield a direct insurance discount, they offer indirect financial benefits by preventing property damage and lowering energy costs. Here’s how:
- Prevent frozen pipes – Smart thermostats maintain consistent temperatures and send alerts if your home dips below a set threshold. In conjunction with freeze sensors, they can help you avoid burst pipes and water damage.
- Manage heat to avoid system strain – Air‑conditioning and heating systems are expensive to replace. Smart thermostats reduce wear and tear by optimizing run times and scheduling filter reminders. Preventing system failure reduces the likelihood of making large claims.
- Energy savings – Many households save 10% to 12% on heating and around 15% on cooling costs after installing a smart thermostat. Over several years, the energy savings may cover the cost of the device itself.
Home Environmental Monitoring
Newer smart devices track humidity, mold risk, air quality and even structural vibration. While insurers haven’t widely adopted discounts for these sensors yet, they provide valuable health and property insights. High humidity can lead to mold growth; poor air quality impacts respiratory health; vibration sensors can alert you to unusual structural movement. As more data links these factors to claims, insurers may develop incentives for adopting these technologies.
How to Qualify for a Discount
Getting a smart home discount isn’t as simple as plugging in a gadget and sending your insurer a picture. Each carrier has its own eligibility rules, approved device lists and documentation requirements. These guidelines can help boost your chances of earning a discount:
Review your policy annually. Technology evolves quickly. New devices might become eligible, or your insurer could update its discount program. Reviewing your policy each year ensures you’re not leaving money on the table.
Check your insurer’s approved device list. Some companies only honor discounts for devices made by specific manufacturers or those that integrate with approved monitoring services. Ask your agent or check the insurer’s website for a list of eligible products.
Provide documentation. Insurers typically require proof of purchase, installation, and active monitoring. Keep receipts, installation invoices and confirmation emails from your monitoring provider. If your system includes a monthly subscription, you may need to show that it’s current.
Maintain the system. Discounts often hinge on continuous operation. Replace batteries, update firmware and test sensors regularly. If your system goes offline and you fail to notify your insurer, you could lose the discount or worse — have a claim denied.
Bundle multiple devices. Some carriers offer tiered discounts based on the number of smart devices. For instance, adding a monitored security system plus leak sensors and smart detectors could qualify you for higher savings than installing a single device. Ask whether you need all devices on the same monitoring plan to qualify.
Your Savings Potential: Crunching the Numbers
Let’s do the math. According to Bankrate.com, homeowners insurance premiums average roughly $2,397 per year for a $300,000 home. With discounts ranging from 2% to 20%, your savings can be significant:
Two percent = $47.94 in savings
Five percent = $119.85 in savings
Ten percent = $239.70 in savings
Fifteen percent = $359.55 in savings
Twenty percent = $479.40 in savings
These numbers illustrate how a relatively small investment in smart technology can yield recurring savings every year. The benefits aren’t purely financial. In addition to discounts, fewer claims mean less hassle, lower deductibles, and more peace of mind.
Beyond Direct Discounts
Smart devices also reduce your indirect costs:
- Preventing costly claims – Water damage claims can easily exceed $10,000 once you factor in drywall repair, flooring replacement and mold remediation. A $50 leak sensor could prevent that loss entirely.
- Avoiding premium surcharges – Insurers may raise your rates after a claim. Preventing the claim not only avoids your deductible but also keeps your premium from rising in subsequent years.
- Improving resale value – Buyers increasingly look for smart‑home‑ready properties. A professionally installed security and leak‑detection system can make your home more attractive and may yield a higher sale price.
- Energy efficiency savings – As noted, smart thermostats and other energy‑management devices cut utility bills. Over time, these savings can equal or exceed your insurance discount.
Putting It All Together
Your home is likely your most valuable asset. With insurance rates climbing faster than inflation and more frequent severe weather causing rates to rise, investing in preventive technology is practical and prudent. By installing the right combination of smart devices, you could save between 2% and 20% on your homeowners insurance premium. More importantly, you’ll reduce the risk of a major loss.
Here’s your action plan:
- Audit your risks. Evaluate your home’s vulnerabilities: Do you live in a flood‑prone area? Is your plumbing aging? Are you frequently away? Identify the hazards you want to mitigate.
- Research devices. Use reputable brands and ensure they’re compatible with your insurer’s requirements. Look for devices with professional monitoring options if you want higher discounts.
- Talk to your agent. Ask about approved devices, documentation requirements and available discounts. Don’t assume you’re automatically getting a discount — policies differ widely.
- Install & maintain. Put devices where they’ll be effective, test them regularly and keep your monitoring subscriptions up to date.
- Review annually. New devices and programs come out every year. Regularly review your insurance policy and smart‑home setup to maximize your savings and protection.
Smart homes aren’t just about convenience or bragging rights. They’re about proactive protection. As the insurance landscape evolves, homeowners who embrace technology will likely enjoy lower premiums, fewer claims, and greater peace of mind. The sooner you start, the sooner you’ll see the benefits.
Top 5 Questions to Ask Your Insurance Agent About Smart Tech Discounts
- Which devices qualify? Get a list of approved manufacturers and models.
- How much can I save? Ask for the percentage ranges for each device type.
- Do I need professional monitoring? Clarify whether DIY devices qualify for discounts.
- What documentation do you need? Find out what proof of purchase or installation is required.
- Are there bundle discounts? See if combining multiple devices yields higher savings.
FAQ: Smart Tech and Insurance Discounts
Q: Do all smart devices qualify for an insurance discount?
No. Insurers typically reward devices that measurably reduce risk, such as monitored security systems, water‑leak sensors, and smart smoke detectors. Gadgets like voice assistants or smart light bulbs may enhance convenience but usually don’t earn a discount. Always check with your insurer to see which devices are eligible.
Q: How much can I expect to save?
Typical discounts range from 2% to 20%. Security system discounts often fall between 5% and 15%. Water‑leak detection discounts can range from 5% to 15% depending on the system’s capabilities. Remember that savings vary by insurer, state, and device.
Q: Does my homeowners insurance company provide smart devices?
Some insurers may offer you a smart device and even pay for your monitoring cost for a certain period of time. It is best for you to ask your insurance agent on what programs your insurer may offer.
Q: Do I need professional installation and monitoring?
For the largest discounts, yes. Many insurers require professional monitoring for security and fire detection systems. DIY devices may still qualify for smaller discounts if they meet other criteria, such as automatic notifications or integration with approved platforms.
Q: Will sharing data with my insurer invade my privacy?
Insurance companies are subject to privacy laws and can’t access your device feeds without consent. Some programs ask you to share aggregated data (e.g., whether your leak sensor is online) to verify eligibility. Read the participation agreement carefully and decide whether you’re comfortable sharing the required information.
Q: What happens if my device fails or my monitoring subscription lapses?
Most carriers require continuous operation for discounts. If your device goes offline or you cancel monitoring, you must notify your insurer. Failure to do so could void the discount and, in some cases, affect coverage if a claim occurs. Keep your devices maintained and subscriptions current.
Final Thoughts
Smart devices are an investment in safety, savings, and peace of mind. By adding the right mix of monitored security, leak sensors, and fire detection, you not only make your home more resilient but also open the door to meaningful insurance discounts. With premiums on the rise, those savings add up quickly year after year. The key is to be proactive: talk with your insurance agent, confirm which devices qualify, and keep your systems maintained. A safer, smarter home today means lower costs, and fewer surprises, in the future.
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*Disclaimer: We offer content for informational purposes; Co-operative Insurance Companies may not provide all the services or products listed here. Please get in touch with your local agent to learn how we can help with your insurance needs.
Sources
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