You own a home security system you purchased from a reputable provider. That same provider offers monthly monitoring services, for which you gladly pay. How would you respond if your home security company offered to sell you homeowner’s insurance? Would you buy from them? What if they also offered to insure your car, boat, etc.?
This question doesn’t represent a flight of fancy. It is legit in the sense that Vivint Smart Home recently formed their own insurance entity. They call it Vivint Insurance Agency. You can read all about it on their website. One of their big marketing advantages is the potential to save you money on your insurance policy by having a home security system installed.
Home Security Reduces Risk
From an insurance company’s perspective, security systems reduce risk. The burglary portion reduces the risk of theft and property damage caused by criminals. Meanwhile, smoke and carbon monoxide detectors reduce the risk of fire and carbon monoxide poisoning, respectively. Flood sensors reduce the risk of water damage.
Needless to say, insurance companies are risk averse. The more risky a property, the higher its insurance premiums. But the equation also works in the opposite direction. Vivint Insurance Agency says that they can save homeowners a significant amount of money if they have security equipment installed.
Agency vs. Carrier
At this point, it is important to explain exactly what Vivint Insurance Agency does. The first thing you need to know is that an agency is not the same thing as a carrier. An insurance carrier actually writes the policies that protect their customers. Some of the most well-known carriers in the U.S. include Progressive, Allstate, and State Farm.
An insurance agency does not write polices. It sells them. An insurance agency represents one or more carriers and sells products on their behalf. Some agencies also act as the intermediary between customer and carrier. That is why insurance agents are able to handle claims, make policy adjustments, etc.
As an insurance agency, Vivint Insurance Agency represents a number of carriers that have chosen to partner with them. Again, you can read all about it on their website. It is assumed that Vivint has worked out discounted premiums for customers who have their security systems installed. Nothing is guaranteed, though. A customer would still need to contact the agency to compare premiums against what they are currently paying.
Potentially Good Deals
Given that Vivint Smart Home specializes in home security and automation, they should know everything there is to know about both. This suggests the ability to secure some potentially good premium deals from insurance carriers. Vivint could explain, in detail, all the home security equipment installed in a given home. They could work as an agent to secure all the possible discounts a homeowner might be eligible for.
Of course, all this speculation. All this author knows is that Vivint is now in the insurance business. What that actually means to customers remains to be seen. If you already trust Vivint for home security and automation, it is probably worth at least looking into their insurance products.
Just remember the difference between an insurance carrier and an insurance agency. They are two separate entities with different goals. A carrier is a company that writes actual insurance policies and pays out when claims are made. An insurance agency is simply a sales entity that represents one or more carriers. Vivint’s new insurance entity is an agency, not a carrier. So despite language on their website, they are not actually writing the policy that would protect your home.