Lowe’s Seeking to Beef Up Insurance Discounts on Iris Home Control

Lowe’s is looking to broaden its relationship with insurance companies with its Iris smart home management system, Kevin Meagher, general manager-Smart Home for Lowe’s told Consumer Electronics Daily Friday. Lowe’s also hopes to boost the rate of insurance discounts customers can get when they link monitoring solutions to a State Farm home insurance policy, Meagher said.

The two companies announced a joint effort last December where they said the cloud-based Iris system “can help reduce losses” due to catastrophic events “by allowing users to remotely monitor and control home devices.” Using Iris, consumers can be notified of a water leak or smoke danger, allowing them to shut off the water source or alert authorities to a fire with the touch of a button, the said.

State Farm is promoting the $179 Iris kit on its website with an offer to policyholders of $25 off an Iris Smart Kit ($269) and $10 off an IRIS Safe & Secure Kit ($179). The State Farm discount for Iris customers isn’t as enticing, with only a 2 percent discount on a homeowner policy and a 7 percent discount on a renter’s policy.

That’s significantly lower than the discount offered to customers of ADT, the other company listed at the State Farm website under home monitoring. ADT homeowners can get up to a 10 percent discount on a homeowner’s policy with an ADT monitoring system, while renters’ savings can be up to 15 percent, it said. The insurer says on the site that “one of the best ways to safeguard your family and belongings is with a home monitoring system -- whether it’s door and window sensors to help deter intruders or water sensors to help detect leaks.” From 2003 to 2012, total flood insurance claims averaged more than $3 billion per year in the U.S., said State Farm. Additionally, it said, American homes experience an unwanted fire every 10 seconds, and every 60 seconds they suffer a fire serious enough to call the fire department. It listed fire as one of the most devastating events that can hit a home, with an average fire claim cost of $52,789, based on Illinois figures from 2012.

Lowe’s is hoping to leverage the cloud-based data it owns to secure better discount rates for Iris customers, Meagher said. Lowe’s has started to find ways to get data from homes, and “because it relates to safety and we can demonstrate to insurance companies that homes are better with the technology than without it,” insurance companies are beginning to offer modest discounts on insurance policies to Iris owners, he said. Lowe’s is working with other insurance companies, too, and has “every expectation that over the coming months and years we'll get much more substantial discounts as we demonstrate the value,” Meagher said.

The risk categories for insurance companies that result in the most homeowner losses are fire and flood, Meagher said. “The fact that we can monitor water leaks, monitor the fire sensors and raise the alarm instantly” can help minimize those risks, he said. Lowe’s is adding products to the Iris roster that can deliver peace of mind, he said, and raise the “value proposition” of an Iris system for homeowners, he said. The company already has a water leak detector in the market and is about to boost its value when it ships a water shut-off valve that can speak to the leak sensor, Meagher said. “When we detect a leak, now we can do something about it and automatically shut off the water supply,” he said.

Lowe’s launched with 50 home control products in 2012 and added four more in its most recent product launch last week. The new products include a Z-Wave garage door opener with tilt sensor ($96.36), enabling users to open the garage door from a phone and get alerts if you drive away and forget to close it, the company said. The PetSafe electronic SmartDoor ($220) controls access to pet doors on a customizable schedule and works with a collar sensor to be sure unwanted pets can’t enter the home, Lowe’s said. The company also launched a motorized window blinds controller under the energy management category and a hose faucet water timer ($39.97) that allows consumers to turn off a hose remotely from a smartphone or tablet rather than having to go out to the spigot, Lowe’s said.

In the two years since launching, Lowe’s has learned “that our business model is right,” Meagher said. Despite the newness of home control to a large segment of the consumer market, home monitoring and security has existed for several decades in the hobbyist world where it was a niche category, Meagher said. “We found we could take an old and staid industry and use consumer electronics technology to make it much simpler for customers to have,” he said.

Today’s products are making consumers safer and having peace of mind, which means different things to different people, Meagher said. A parent might want to use electronic door lock technology to see when a child gets home from school, while another customer might want to use sensors to let them know an elderly parent has entered a room, he said. Many people “just like the convenience,” he said. On average, he said, Iris hub users buy nine to 10 add-on products.