Viewpoint Partner Brief Part II

PART II
How Sensor Technology is Making Homes “Smarter”

In Part Two of this two-part Partner Brief (Read Part One), Mutual Boiler Re looks at how sensor technology is already helping homeowners minimize damage from fires and floods; and the potential impact of the connected home of the future.

The benefits of sensor-driven devices to today’s homeowner include greater efficiency and convenience.  However, the true value from smart home technology is faster intervention, which may minimize damage from fire or flood, thus reducing the potential for significant losses and insurance claims.

Today, sensors that can detect and respond to input from the physical environment, such as heat and moisture, can also provide output to a human-readable display or electronic transmission over a network for reading or processing. When a fire or flood occurs in a home, the homeowner can receive instantaneous notification on a smart phone. 

In the case of a fire, the rapid notification can enable the homeowner to initiate a call to the fire department.  With sensors placed near appliances and pipes, a detected leak will sound an audible alarm, signal a ball valve to shut off the main water supply to the house, and notify the homeowner’s smart device – all in about five seconds. 

"In addition to alerting the homeowner about a potential problem, a sensor can often provide diagnostic data. This can help expedite claims process by allowing the insurer to better understand the events that occurred leading up to a breakdown," says Jim Callahan, operations vice president, claims manager, Mutual Boiler Re. 

Smart smoke detection systems offer an upgrade from old-fashioned smoke detectors.  Connected to the internet, they transmit a warning remotely, facilitating a faster call to emergency services when the homeowner is away.  In addition, the app on your phone makes it possible to receive notifications when batteries are low, eliminating the annoying chirp warning. 

Forty percent of US homeowners have reported water damage in their homes, about 14,000 every day – with an average insurance claim of $7,000. Mitigating loss from water intrusion and leaks is possible with detectors, devices used in HVAC or appliance systems to sense the presence of water on floors or outside walkways. Worry about a flooded basement caused by a non-functioning sump pump or a water heater leak can also be lessened.

Conservation and Cost Cutting With Sensors

Sensors that are employed with lights, appliances and lawn sprinklers save energy and water, increase the efficiency of managing food and may reduce the overall cost of running a home.

Lower electric bills are possible with a sensor that will shut off lights when someone leaves a room and switch them back on when they return.  Smart relay modules plugged into electrical outlets can be pre-programmed to turn on appliances for food preparation as needed during different times of the day.  And sensors that monitor and manage lawn sprinkler systems – controlled from a computer or smart phone from across the street or across the country – have been shown to reduce water waste by nearly 40 percent. 

Vision of the Future

Security devices can transmit data wirelessly through electronic signal formats, such as WiFi, Zigbee or Bluetooth, to a local hub that serves as a transmitter and receiver. The hub is plugged into a power outlet so that it is always on and always connected through a cellphone carrier to the Internet, where a cloud of servers provides the security monitoring service. From the online service, the data is routed back to the homeowner’s cellphone, where each device in the home can be grouped together, monitored and controlled remotely.

Many consumers who have dipped their toes into the home sensor technology pool have done so with individual devices that are not connected to each other.  However, experts say the smart home is only as smart as the hub that orchestrates everything behind the scenes – an array of thermostats, room sensors, switches, security devices, lights and more. 

The daunting challenge will be fashioning it all into an inter-connected system that works together smoothly with a single user interface.  Some of the smart hubs coming onto the market today support only a small number of devices made by the manufacturer of the hub. Some are compatible with third-party devices and support most of the major wireless protocols relied on by smart devices.

Consumers are advised to consider the devices they already have in their home and to think about what devices they plan to add to their network down the road.  Determining whether the hub you plan to purchase will support multiple brands could help avoid a massive upgrade later, and provide a suitable technology solution for a fully connected smart home.   

Caution to Consumers

The technology that is improving the quality of life at home is not without risk, however.  Tech-savvy hackers and cyber criminals have raised the question vulnerability of internet-connected devices in the home – wireless security systems in particular. Researchers have found that some top-selling home alarm systems can be subverted or manipulated to create a false alarm. 

Of course, old-fashioned home security systems were not invulnerable, either.  The wires that connected security cameras and other sensors to a phone line and alerted authorities to an intruder could be circumvented by burglars who would simply shut down the system by cutting the phone line.  

Companies that manufacture home security products are taking steps to improve their design to thwart the criminal element, designing software communications systems with better encryption and security measures. The next line of defense is the consumer, who can aid in the prevention battle by setting up authentication with strong username and password combinations and keeping their home IP address private.

About the Author

Bruce Tagg is a senior engineering exposure analyst for Mutual Boiler Re, a member of the FM Global Group and provider of equipment breakdown reinsurance for more than 240 treaty partners. Bruce has more than 30 years of engineering and loss control experience in the insurance industry and is responsible for internal and external support, including training and on-site risk assessment.