- The Smart Home
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- Advanced Sensors
Insurance Providers Could Drive the Market for Multifamily Leak Sensors
Multifamily housing is emerging as an appealing vertical to vendors of residential Internet of Things (IoT) technologies. While this market is still nascent, many use cases have firmly established their role in moving the multifamily housing market forward.
A central use case has been security and access management through connected locks, cameras, and software. These are used to manage door schedules and permissions when several people are filtering through multifamily buildings on a daily basis, such as renters, guests, maintenance staff, delivery personnel, and potential tenants taking tours. Another important use case is to drive energy efficiency. For instance, smart thermostats are becoming more common in multifamily dwellings.
Leak Detection Is Appealing
Beyond these traditional use cases, newer ones have also entered the market. One of these is water-leak detection. Strategically placed smart sensors can detect when unwanted water is present, then alert a renter or a building manager of the problem so quick action can be taken to stop the leak. Some leak detection systems can even automatically shut off the water once a leak is detected.
Leak sensors can be incredibly beneficial in a single-family environment but are especially pertinent in multifamily buildings. Water damage is one of the most dreaded events for a multifamily building owner or manager. In a multifamily environment, a leak could result in flooding of not only one unit, but also multiple floors beneath, resulting in a massive insurance claim and headaches for residents, building managers, and insurance companies alike.
Insurance providers are equally interested in water-leak detection. Insurance companies have traditionally provided discounts for good behavior, including technology that reduces the risk of a claim occurring, such as a security system that is monitored by a third-party provider. Leak detectors are starting to become an extension of that story as more and more insurance companies are looking into providing discounts based on the adoption of these devices. For example, American Family Insurance offers a smart home discount for certain smart leak sensors.
Insurance Industry Will Play a Large Role in Driving Adoption (Or Not)
While there is growing interest and momentum in smart leak sensors, future growth in this vertical largely depends on whether or not insurance companies will offer lower rate options for people that adopt the technology solutions. On one hand, IoT is providing an unparalleled opportunity for insurance companies to redefine themselves and transition toward a model focused on the prevention of losses rather than profit from risk. On the other hand, any major investment in IoT by the insurance industry can undermine traditional business models.
Multiple insurance providers have invested in companies that are disrupting the insurance industry. A striking example is an ongoing partnership in the UK between Aviva and HomeServe. Aviva also recently announced an acquisition of a majority stake in Neos, a smart home insurance provider. Time will tell if these investments and commitments will continue and truly transform the industry or if insurance giants will keep IoT innovations at an arm’s length.