Insurance companies will set the rules in AV and Home Automation (Part 1)

Let’s start with very simple questions:
- Would you feel safe for a long trip in a plane or a bus that hadn’t had its annual maintenance?
- Or after your favorite car audio dealer just finished installing a powerful high-end audio system in your car, he tells you that he can also improve the brakes and the engine. Would you let this great car audio specialist touch the vital organs of your car?
- And do you think your car insurance will cover you in case of an accident due to a problem with the brakes?

Now, let’s parallel those questions with Smart Home:
- Knowing that today a wide range of smart devices allow to remotely open doors and external shutters, turn off lights, and sometime disable alarm and CCTV system, knowing that those devices are connected to your local network, would you feel safe and sleep well in a Smart Home that hasn’t been installed by a certified professional with a specific professional insurance and at least once a year get your home audited, tested and maintained?
- What will you say to your insurance company the day your Smart Home has been burglarized during your sleep, without any traces of anything broken, simply because the burglars were able to figure out the “0123456789” password on the “Baker’s Family Wi-Fi”, open the front door, and disable the alarm system?
- Rules of insurance policies are clear: To be covered, a house is supposed to be shielded, using certified by insurance alarm, door lock and robust construction materiel. And if you leave a door or a window open, or if your house has a “breach”, they will not cover you. Is an unsafe local network or a non-maintained home automation system that allow to control a home is considered as a “breach” that can disengage your home insurance?
- By the way, is it considered hacking to try “0123456789”, a mobile phone number or any common password to login the network of a house? What kind of password will an insurance company consider strong? Do you think an insurance company will consider a smart house safe and cover it if the SSID is “The Baker Family Wi-Fi”?
- And what if the burglar has been able to break your smart home using a well-known security breach hidden in an email attachment? A security breach on a Smart Home hub that has been corrected by the manufacturer with a new firmware years ago. Do you think your home insurance is still working?
- Is it mandatory and how fast a smart home owner is supposed to update the firmware on all connected device for the home insurance company to continue to cover the house? What if I’m on a 3 weeks-vacation during that moment? And what if it’s a Home Technology Company who installed it?
- What are we supposed to do with all smart devices that are not supported by manufacturers anymore? Meaning that even if they discover a security breach, there will never be a firmware update. Is it a risk and will we still be covered by our insurance if we own old connected devices?
- Things bad people can do once they are in your network can be simple like getting your login and password, social security number, but also disable your smoke detectors or even - and that is super vicious - changing the temperature or the hygrometry of a room that keep safe some art or wine... Are you sure your home insurance will accept that you get your house fully automated without any specific precautions? By the way, what are those specific precautions? Will they require a certified Home Technology Company? But with what kind of certification and professional insurance?
- Talking about rules of insurance policies, do you know that some insurance companies will not cover you if you have a home automation that simulate your presence by sometime opening exterior shutters. Others will not accept if it’s not a proper electrician or plumber that change the original thermostat of a gas heater with a smart one. As the original seal of the installation done by a real professional with a specific insurance for his job is broken, the guaranty of the manufacturer is dead, and the insurance will not cover.
- Don’t you think it’s bizarre that in some case, the insurance policy requires for a specific type of alarm connected to a 24/7 surveillance central, installed by a certified professional and does not require the same type of remote monitoring for the home automation that control the house? Some other will not accept that the alarm system is connected to a local network.
- Do you think that one day insurance companies will have a listing of banned devices in a house?
- How long until insurance companies require every smart house to be installed by a certain kind of certified professional that’ll give maybe a certification to the house and yearly maintenance? And by the way, we will also need to define exactly what is a smart house and what connected device is potentially a breach.

For the moment, the only things insurance companies are focused on is “how can we use connected devices to get more data to analyze it or to detect flood, fire...”. But none of them seems concerned by the danger of connected devices and the ravage it can cause. I called several insurance companies in the UK and in France, pretending I’m about to build a full smart home and none of them has been able to answer my question: “What specific precautions I should take to not to break my insurance policy?”. The fun part of it is: Each time I told them I’ll use a professional, they thought I was obviously talking about an electrician! (you know, someone with a real job in the construction industry). Yep, too bad, in their mind, and I think it’s also the case of 99% of Mr and Miss everybody on this planet, how is it possible that a “Hi-Fi” or a “Home cinema” guy can be a Home Automation installer? Do they belong to the construction industry? Do they even have a specific degree, training or specific insurance to cover this kind of job?

Until insurance companies decide what they’ll do, and until a trade association decide to create a real status with specific schools, degrees and insurance like every plumber in the world already have, Home Technology Companies must stay on the line. They have a duty to inform end users and propose them for solution like service, maintenance and why not remote supervision, so the house can always meet the latest and highest possible security standards to stay covered by the home insurance policy. CEDIA seems - or is supposed to be - the legit sentinels of this industry and must prepared Home Technology Pros to give answers. I wrote “seems to be” because CEDIA with its 4000 members is totally inexistent compare to the construction industry. Too busy in organizing awards parties for best €250K Home Cinema design. But it’s a choice. On the other hand, Home Technology Companies must get themselves ready and get all possible manufacturer training and certifications like CEDIA provides for example. Never the less, if installers fail in this duty of advising and proposing for service and maintenance, it’s clearly a professional negligence and there are laws for this in every country of the world.

The reality is this one: The rules of the games are sooner or later going to be defined by the insurance companies because in the end they are the one who covers people and pay. They will have to evaluate this new situation, update their terms and conditions to meet the new technological risks every home on earth will have to face. As they obviously can’t be aware of everything on earth, they will need experts, standards, labels to relies on.

I saved the most important question of all: Do we realize that today, insurance companies can send an email to all home owner and tell them: “If you want us to cover your smart house, you need to call a real construction industry professional like an electrician for example (not your local hi-fi and video specialist at the corner of the street) and an IT companies to handle the network. You’ll also need a yearly service & maintenance contract”. They can press a button and stops all Home Technology Pro to touch any house just because we do not comply with the construction industry requirements.

Be ready for part two of this article in a few days...