Security

Is your security system increasing your insurance premium?

Cocoon Labs

Lifestyle

If you’ve registered your interest in Cocooon then you’ll know that we like to send a personal welcome email to everyone who registers their interest in Cocoon. I recently shared email with an avid Cocoon supporter who asked if Cocoon could bring down the cost of their home insurance compared with a traditional installed home alarm system. Like anyone else I want to pay less for my home insurance but after digging a little deeper I found that often to reduce premium costs you have to spend much more elsewhere…

Wooden dollars, pounds, euros.

To give some perspective I obtained quotes for a range of properties on a leading UK price comparison site (our full findings are below). We found that a traditional alarm won’t deliver an annual cost saving and in some cases will increase premiums!

  • Maintenance is mandatory – No insurer offers a discount unless the system is serviced annually by an approved maintenance company. The maintenance cost is likely to exceed any discount.
  • Premiums can go upMORE TH>N premiums for all properties we tested increased by 4% when an alarm was installed and Halifax increased premiums slightly on some properties.
  • Lower discount for lower crime areas – Of the insurers that seem to offer a variable discount, the discount was greatest in areas with a high crime rate.
  • Discounts may indicate you’re over paying – Though some insurers offer a discount, for all the properties we tested the cheapest quote was from an insurer that doesn’t!

The premium problem

Premiums are the result of an equation. The equation looks at a number of variables including risk and your personal claim history in order to assign a cost of insuring you, benchmarking you against a sea of other people who have equally been assessed and paid into the collective insurance pot.

Premiums by their very nature tend to increase over time and the small, often non-existent discounts give some indication as to how ineffective traditional security systems have become at preventing theft. Traditional home alarms are not the deterrent they once were and it feels like insurance companies know this…

intruder-alarm-insurance-premium-discounts

Smart trumps traditional every time

We’re making home security accessible to everyone. Cocoon requires no installation, prevents false alarms by learning the rhythm of your home and delivers a meaningful response to intruders.

As in any industry, it takes time for “industry standards” to catch up with innovative technology. In 2014, if you tell your insurer you have an alarm, most require that it is installed and maintained by an NSI or SSAIB approved company. Cocoon requires no installation or on site maintenance so this requirement is out-dated.

The choice is entirely yours but you now know that with Cocoon you could be better off compared to the high installation and maintenance costs of an ineffective traditional alarm system.

For those of you where your insurer requires that you have an alarm we’ll do our bit to demonstrate the effectiveness of the new wave of smart technology at preventing theft and in time redefine the insurance “industry standard” for home security.

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