12 Stats That Show the Future of DIY Home Security for Insurance Carriers
The rise of remote work, AI automation technology and other new trends have seemingly birthed a DIY home security revolution. With more homeowners investing in smart home technology than ever, the home security sector has followed suit. Here are 12 smart home statistics that confirm DIY home security is the future.
Smart Homes Are A Growing Trend
Many recent studies suggest the smart home security market is growing. Here's are four things research has shown about the growing adoption of smart home security:
1. 2025 will see an estimated 478 million smart homes globally
The pandemic has prompted the faster adoption of smart home technology among worldwide consumers. According to Statista, the trend will result in as many as 478 million smart homes in use by 2025.
2. 44% would buy smart home technology if it were cheaper
A survey by Coldwell Banker and CNET found that 44% of the 4,043 respondents without smart home technology would purchase it were the technology less expensive. This suggests that the market potential is larger than it looks on balance sheets now and going forward.
3. 47% of adults age 18 to 34 own smart home products
According to the same Coldwell Banker survey, younger adults are purchasing more smart home products than other age groups. Among adults aged 18 to 34, 47% own at least one smart home device and are willing to spend more thanks to a better understanding of the technology's benefits. With younger adults making up the greater portion of the smart home security market today, these customers will likely stick around in decades to come.
4. 52% of smart home products are centralized in the living room
The survey by Coldwell Banker and CNET also found that most smart products are centralized in the living room, typically at the front door area. With consumers looking to benefit from a central "hub" for their homes, smart home security is optimized for homeowners. These DIY security smart hubs can be touch screens mounted by the front door, speakers with two-way talk and voice recognition, or even smart cameras with facial recognition.
DIY Home Security Is Saving Users Money
Most smart home security companies have monthly or annual subscription plans that customers can cancel anytime with no strings attached. Traditionally, home security providers required homeowners to sign expensive long-term contracts. The new model, being less risky, has brought more customers to the home security market.
5. 13% of smart home security customers prioritize energy management above all
Smart home security not only saves customers money with DIY smart home monitoring but also saves on monthly bills by automatically adjusting power output based on the usage of a given appliance.
For example, smart lights and smart thermostats can be programmed to change their settings when the user leaves the house. By gathering data from all home appliances, a fully connected smart home can generate detailed energy consumption reports and help consumers optimize their usage significantly.
After the pandemic, with more of the workforce at home than ever, 13% of homeowners want smart home security for the sake of saving energy consumption above all else.
6. Water leak detectors save an average of 10,000 gallons of water each year
According to the Environmental Protection Agency (EPA), the average household can leak 10,000 gallons of water in a year. Water leak sensors like Notion's can help mitigate homeowners' claims headaches. By catching leaks before they cause damage, users not only save on repair costs but also their water bills.
7. 45% of home damages are water or freezing related
DIY home security is better able to prevent water damage by detecting leaks automatically and alerting users immediately. Smart water-leak sensors send alerts to users' phones when water is detected. Depending on the smart home security option, users may be able to turn off their water line remotely to respond right away. This goes a long way in reducing water damage costs, which represent 45% of home damages annually — more than the losses from fire and theft combined.
8. Insurers save 30% with by combining insurance with smart home security
DIY home security also helps insurance carriers save money by detecting environmental damage sooner and reducing fraud. A report by McKinsey found that smart home automation can reduce the cost of claims for insurance carriers by as much as 30%.
The Internet of Things (IoT) is Here
The Internet of Things, or IoT, is the connectivity of smart appliances with a central hub where users can access automation settings and other features. Here are the smart home statistics that suggest the rise of IoT is giving DIY home security a boost:
9. 64% of consumers would be interested in smart home products in exchange for an insurance premium discount.
A growing number of homeowners understand that smart home technology can help them have peace of mind when they're away, and it can help them mitigate potential claims disasters through proactive detection. According to a survey by Nationwide, consumers' interest in smart home technology grows if they can get a premium discount in return.
10. Smart Home Technology Prices Are Dipping as Much as 33%
With new products continually hitting the market, competition and demand have driven the average price for various smart devices down. For example, data from Parks Associates shows that the cost of smart thermostats in 2020 dropped around 33% from 2017.
11. 23% of US households now own at least three smart home devices
The more consumers replace appliances with their smart home device counterparts (i.e., smart lights, smart locks and smart TVs) the more they can take advantage of home automation and energy savings. In February 2021, research from Parks Associates revealed that 23% of smart home users own three or more smart home devices. This suggests the spirit of IoT is alive and well among a significant chunk of the market.
12. Convenience is the biggest motivator driving smart home adoption
A survey by Hippo showed that, across demographics, the largest share (46%) of smart home users are most interested in smart home devices for the convenience they offer, as opposed to other benefits. Smart home devices that report back to a single hub allow users to manage their system and appliances remotely, as well as automate tasks so they don't have to think about them.
DIY Home Security: The Outlook Ahead
The future of home security is inextricably connected with the rise of IoT, 5G, and smart home devices. Even the trend of working from home is aiding the DIY home security market, with more homeowners able to save money with self-monitoring. The decline in the average prices of smart home devices also portends a continued rise in smart home device usage and DIY home security adoption for years to come.
Insurance carriers need a partner in smart home technology that can help them stay ahead of these trends. Reach out to Notion today to see how we can help you build your insurance business for the future.