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Internet of Things to reduce risks. Today’s IoT devices can monitor for multiple perils in a home and provide alerts to minimize damage. (Credit: Nmedia/Adobe Stock)

For those in insurance who have been around a long time, especially in claims, you recognize how “manual” much of the claims process is. IoT will have a tremendous impact on how claims of the future are adjudicated.

Take, for example, a very common residential claim with the recent Texas freeze. A cracked pipe allows thousands of gallons of water to flow from the ceiling into the home, damaging all the contents, flooring and drywall in its path. Historically, the adjuster would go out and scope the damage, retain a mechanical engineer to conduct a causal determination of the pipe break, and then write a report. This takes several days and costs anywhere from $1,500-4,000. With IoT devices, the game changes, impacting insurance claims in primarily three ways:  1. reducing claim frequency/severity; 2. providing clear liability/root cause determination; and 3. providing documented evidence for subrogation.

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