The Internet of things (IoT) is a frequently used term to describe the evolution of in-home physical devices such as appliances, buildings and other property that, through embedded software and electronics, share data with other devices or computers. While such technology has its perks (e.g., increased energy efficiency or tailored interactivity of appliances), new risks will also emerge. For example, a cyber attack that renders appliances in the home unusable or gives hackers access to your pay-per-view accounts could soon be a reality for millions of consumers.
Unfortunately, most standard insurance policies are designed with tangible losses in mind (e.g., a lightning strike damages an appliance or a tree falls on your garage). Thus, the hazards from IoT compatibility might not be covered.
If you have IoT in your home or are considering adding the technology, it’s important to get the right homeowners insurance coverage to match.
I don’t want you to have to buy more insurance, but thought you might want to ask your agent the questions as to whether you would be covered in a breach.