Smart water leak detectors could end up saving you more than you’d think

I noticed at the CES earlier this year the increasing number of intelligent sanitary products this promises to monitor for problems with your pipes, including those that automatically shut off your water in the event of a leak. The functions category established options from major manufacturers that have been on the market for several years at this point – but compared to more popular smart home categories such as lighting, Castles and Thermostatshave the devices struggled to break through with consumers.

Now one of these manufacturers is turning to the research community to strengthen the playing field. Especially the makers of the Flo by Moen Smart Water Shutoffhas teamed up with an analysis team from LexisNexis Risk Solutions to participate in research to investigate the economic impact the device can have on homeowners and their potential for insurers. Now, You can read the full results here.

“Our results were very revealing,” says the summary of the report. “They point to a strong correlation between the installation of Flo by Moen Smart Water Shutoffs with fewer and less serious claims. They also support the broader benefits of smart home technology and smart home insurance programs for network operators and consumers.”

A spokesman for the Flo by Moen brand tells CNET that the study was initiated by LexisNexis as part of its effort to explore potential loss prevention strategies for insurers. The numbers are also interesting for consumers and worth a look for anyone considering an investment.

An ounce of prevention

The report examined 2,306 households where the Moen Smart Water Shutoff Flo was installed. In particular, the period of one year after installation of the device and the period of two years before in which the houses were not equipped with intelligent leak detection devices were examined. In the last year in which the device was installed, the number of paid water claims in homes was reduced by 96%.

From there, the study compared the data to a control group of 1.3 million households of similar size and value who did not add any intelligent sanitary products at all in the same period. The number of water claims paid in the third year was 10% higher than in the first two years.

This supports a fairly obvious conclusion: the intelligent sanitary technology has done its job and prevents major leaks in the test houses from wreaking havoc.

The average severity of control group claims remained relatively constant before and after installation. In the test houses equipped with Flo, the severity of the damage decreased by 72% the year after the device was installed. This is another strong statistic, especially given that the cost of dealing with a leak and the associated damage like mold can easily reach thousands of dollars.

Smart plumbing, smarter insurers?

The report notes that leakage damage is one of the highest “loss costs” for carriers, and that the insurance industry spent more than $ 2 billion in claims for non-weather-related water damage in 2019 alone. The average payment in the US: $ 9,700.

For this reason, the report encourages insurers to offer discounts or other incentives to customers who are willing to install smart leak detection products in their homes. Some porters yes, although the discounts are not widespread.

“For network operators, including water leakage and shut-off devices as part of smart home strategies, adoption of these devices could be driven, which will not only improve the customer experience but also reduce the cost of loss,” said LexisNexis, adding that the company previously conducted internet-of-investigations showed that consumers who own one or more smart home devices are willing to buy additional devices if they are offered an insurance discount.

Another key finding from the report is that homes with a Flo shutdown device prior to installation had an average claim severity that was on average three times higher than that of the control group. This makes sense if you think about it – the people with the most loss from a leak were the ones who were more likely to invest in preventing these leaks.

LexisNexis calls this “a costly loss turning point” and suggests that insurers who push ahead with technology before customers reach it could further reduce the number and severity of paid water damage.

“Our research suggests that industry assumptions about the potential benefits of smart home technology are warranted,” the report said. “By extracting insights from data generated with smart home technology, network operators can gain a greater understanding of the risk they are taking and how that risk can change over time.”

Lot with potential

The report also points out that Flo by Moen is not the only provider in the smart plumbing market. Competing systems from names like Phyn and Govee offer different functions, from push warnings when water is detected, to the device-specific water pressure and consumption values, to automatic shutdown or all of the above functions.

“The right device for a home depends on the conscientiousness, budget, and individual needs of a homeowner,” the report said.

In the case of the Flo, the automatic shut-off valve currently costs about $ 400 on Amazonand the wireless pucks that detect the leaks are sold separately, so this is not an inexpensive investment. The Phyn automatic shutdown system costs even more. at $ 700. Other systems that notify you when a leak is detected without automatically shutting off the water cost a lot less – and you have many options to choose from.

There are good reasons for this competition, says Blake Kozak, Senior Principal Analyst at Omdia Who studies devices and smart home tech.

“Water leak detectors are expected to be one of the fastest growing smart home categories in 2020, with 47% growth over the North American region in 2019,” Kozak told CNET. “The installed base in 2020 is expected to reach around 6.5 million and will grow to around 28 million by the end of 2023.”

Kozak also shows the boom in smart home security productsThis suggests that the way to customers for this type of preventive technology is clear.

“In contrast to intelligent lighting and similar comfort devices, the detection of water leaks has a similar potential as security devices (camera and burglar alarms), in which consumers find a material return on the device installations,” he writes.

As far as insurers are concerned, Kozak agrees that they also have room to promote acceptance by offering discounts, although he warns that Omdia hasn’t made much effort in this area yet. In any case, we will have an ear on the ground as the leak detection landscape continues to take shape.

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Correction, May 9th: This story has been updated to clarify that the LexisNexis report was an independent investigation and not a paid study.