Help me with a question for work!

jewofgolf · October 29, 2016

Hello! I am wondering what you all would consider the value of the following product:

For a homeowners insurance policy, you are responsible for keeping up with the home's normal wear and tear and/or smaller repairs. But sometimes, things happen when we are not around. This product connects via your wifi signal to notify you of the following potential issues:

Fire alarm going off when you are not home. This allows you to ask a friend or neighbor to go check it out, or even call the fire department.

Pipes getting close to freezing. Perhaps you are out of town and the power went out.

Pipes starting to leak. Sometimes you just don't look under the sink enough.

For all of these things, preventing a claim saves you trouble and money (in the form of your deductible, which can range from $500 to $5,000). I am working on figuring out how much more people are willing to pay for such a "value added" service. What I''m really getting at is the following:

You get a quote at your independent agent. One company doesn't offer this product for free (at all), while one company does. What price difference would you be willing to pay to have the service?

I'm trying to whip this up quickly for an ROI calculation. I appreciate any and all responses!

highergr0und · October 29, 2016

I would expect a discount, not to pay for this. I understand the prospect of saving on a deductible payment, but ultimately the insurance company gets the biggest benefit from something like this, ie i save $1k they can save $100k. Think more like snapshot from progressive. The extra insight into the insured actually makes insurance cheaper.

Also, lot of smart alarm systems offer some of these benefits.... My fire alarm is wired into mine and dispatches the fire dept (trust me, it works after I turned on the wrong burner on a stove and smoked up a spatula). They also have a flood/freeze sensor, I just didn't buy it.

PS, if the power goes out, how will the device use wifi to alert me that my pipes are about to freeze? Even if I put a battery on my router modem, it would run out well before enough time goes by for pipes to freeze. Of course that's kind of an edge case...

Not trying to be mean, just honest

jewofgolf · October 29, 2016

I would expect a discount, not to pay for this. I understand the prospect of saving on a deductible payment, but ultimately the insurance company gets the biggest benefit from something like this, ie i save $1k they can save $100k. Think more like snapshot from progressive. The extra insight into the insured actually makes insurance cheaper.

Also, lot of smart alarm systems offer some of these benefits.... My fire alarm is wired into mine and dispatches the fire dept (trust me, it works after I turned on the wrong burner on a stove and smoked up a spatula). They also have a flood/freeze sensor, I just didn't buy it.

PS, if the power goes out, how will the device use wifi to alert me that my pipes are about to freeze? Even if I put a battery on my router modem, it would run out well before enough time goes by for pipes to freeze. Of course that's kind of an edge case...

Not trying to be mean, just honest

We are wrestling with these same thoughts.

Nonetheless, there is a benefit and some value that some of the customers would place on this.

It would be free, but I'm attempting to quantify the increased attractiveness of the product with this thrown in.

highergr0und · October 29, 2016

Is there a downside to inclusion? Would you put any penalties in the policy if the client had an alert go off but ignored it or refused to act before the problem got out of hand?

jewofgolf · October 29, 2016

Is there a downside to inclusion? Would you put any penalties in the policy if the client had an alert go off but ignored it or refused to act before the problem got out of hand?

No. I would say though that if they were alerted about it and chose to do nothing, there is an awful lot of burden on them if something bad ends up happening.

But as far as I'm concerned, it's assumed that most people have the good faith to fix things that they are aware of.