Insurance company technology is already monitoring drivers with
devices like Progressive's "Snapshot," which logs your mileage,
speed, braking and other data. Now an onslaught of James Bond-like
gadgetry will give insurers a similar look into our homes.
Most of this equipment --
forward-looking infrared (FLIR)
, moisture meters, vibration detectors, acoustical hearing devices
and air-born ultrasound -- appeals to homeowners who want to
protect their property from electrical fires, leaks, mold and other
hazards. There's currently little downside, and a lot of upside, to
the technology that property-casualty insurers are now offering,
mostly to their high net worth policyholders.
But new insurance patents, such as "spectral images," could give
privacy experts and regulators cause for concern.
Filing the patents
A search of recent patents and press releases shows that
companies are engaged in a battle to find and adapt new technology
that will out-distance and differentiate themselves from
Chubb, Fireman's Fund, The Hartford, USAA, CNA and Zurich are
among the leaders in this race to reach into the homes of
Insurers that target high-end clients have the advantage; their
clientele can afford the higher premiums that pay for these costly
services. Homeowners with expensive art and jewelry collections are
usually more than willing to pay for special treatment, and insurer
Chartis offers a special service
for yachts. However, an insurance technician is unlikely to visit
the average policyholder.
From Benz to bicycle
But the cost of these devices, such as the FLIR cameras that
take "pictures" inside walls, ceilings and floors, have plummeted
to the point where they are now stocked on the shelves of Home
Depot. It's only a matter of time until these devices will be in
your home and affecting your insurance rate -- if you want
"When we started using FLIRs in 2006, the camera used to cost as
much as a Mercedes-Benz. Now it costs as much as an expensive
bicycle," recalls Keith Weinhold,
Chubb's appraisal technical specialist
, who predicts that prices will come down further.
The camera itself has also shrunk and is now the size of a
flashlight. And before long it may morph into an app on your cell
phone, say experts.
Hot spot, cold spot
A FLIR records heat images. By going through an ordinary home,
which usually takes about an hour, a technician can find "hot" and
"cold" spots, particularly in winter when the temperature is warmer
inside than outside and when there is moisture in the form of rain
Hot spots can indicate an electrical malfunction; electrical
circuits should normally run no hotter than 110 degrees Fahrenheit.
Cold spots can show a lack of insulation, but can also indicate the
presence of moisture and mold -- or the hint of a water leak.
For want of a clip
Fireman's Fund Insurance Co.'s risk services manager Richard
Standring tells of one leak that could have sent a ceiling crashing
down and caused a quarter of a million dollars in damage. A new $8
million home had a wet bar in the master bedroom with a slow leak
dripping down into the "great room." Standring's FLIR helped to
pinpoint the culprit: a 37-cent clip holding a water line onto the
"This technology is so good it can show you a problem before any
loss has occurred," he says.
For homeowners, the time to have your insurer do what amounts to
a "CAT scan" of your house is before you purchase a house, or when
new and sometimes sloppy construction can leave a home
This monitoring is voluntary and no state approvals are
currently needed, says Weinhold, who compares it to an inspection
by a structural engineer. State regulators did not respond to our
inquiries about this monitoring technology.
And it's less expensive than most alternatives. Homeowners can
use FLIR cameras themselves but will probably get false readings,
says Weinhold. A visit by a structural engineer will cost several
Clients who use their insurer's service may not get a premium
reduction such as the one they receive with an auto insurance
product like Progressive's Snapshot program, but they don't pay
extra for the service either since it's already factored into their
premiums. And it benefits both sides by thwarting potential
But the future may be ominous.
The Hartford has filed a patent that will allow it to obtain at
least two "spectral images" of a customer's house. The first would
be a "baseline" that would show a property's chemical,
electromagnetic and light spectrums at the time it's insured. The
second would be taken if and when any damage, such as a wildfire or
earthquake, occurs. Both sets of data would be stored remotely in a
Comparing the two images would allow The Harford to determine
whether or not the claim should be paid. This could benefit the
policyholder by getting his claim paid quickly. But it could also
be used by an insurer as evidence to
A spokesperson for The Hartford, Thomas Hambrick, said that this
patent represents a "future concept" and "we have no current plans
to implement it."
While The Hartford's device would remain outside the home, USAA,
a major insurer of military personnel and their families, has a
patent for a data recorder that would be installed
a home to observe and track conditions such as temperature, wind
speed, humidity and mechanical vibrations.
USAA wouldn't talk about its data recorder, which could be used
to watch the homes of military personnel serving abroad for
extended periods. But it could also provide evidence against the
homeowner if he or she filed a claim that USAA considered faulty,
such as one for wind damage.
As more and cheaper technology becomes available, insurers will
want to use it to provide better home monitoring for you -- and
them. If people don't mind monitoring devices in their cars, maybe
they won't mind their home insurers moving in.