The hard property insurance market forced carriers to get more serious about preventing losses before they happened. In higher-risk homes, especially high-value properties, automatic water shutoff systems and other connected devices became more than optional smart-home features.
In some cases, they were required for coverage. In others, they helped homeowners qualify for credits or helped a homeowner get coverage that might otherwise have been harder to secure. That was a meaningful shift. Technology moved closer to the underwriting process itself.
As market conditions improve in some areas, carriers may be tempted to loosen those requirements. The pressure is understandable. When more capacity enters the market and competition for desirable risks grows, fewer conditions can make a policy easier to sell. But the risk inside the home did not improve simply because the insurance market did. In fact, the cost of water losses continues to rise. According to the 2026 LexisNexis U.S. Home Trends Report, the severity of non-weather-related water claims increased 63 percent between 2019 and 2025, even though the number of claims decreased. LexisNexis calls these losses among the most preventable major loss events and points to leak-detection technology as one way carriers can help reduce them.
A pipe can still burst. A supply line can still fail while a homeowner is away. A slow leak can still spread through flooring, walls and ceilings before anyone knows it is there. The conditions that made prevention valuable during the hard market didn't disappear. That value should not disappear when underwriting conditions improve.
Installation is only the beginning
Another lesson carriers should take from the past several years is that requiring technology is not enough. Data from Beagle Service's Watchdog monitoring system revealed that, in a sample of 2,300 monitored automatic water shutoff devices, roughly 40% were offline for an extended period, leaving homeowners and insurers exposed to a potential loss.
The reasons are simpler than they might seem. A homeowner changes a router or Wi-Fi password. The internet goes down. Power is interrupted. A device is installed incorrectly or loses its configuration. Sometimes a homeowner disconnects a system because it becomes an inconvenience. The result is the same. A device installed to detect a leak and stop the flow of water may no longer be able to do either. That should matter to a carrier that relied on the device when it evaluated the risk or granted a premium credit.
The industry has historically focused heavily on whether mitigation technology is present in a home at underwriting. But it's time to take that a step further to ensure that the devices continue to operate after the policy is written. That doesn't mean insurers need to monitor every device every minute. It does mean they should decide what continued protection actually requires.
If a mitigation system helped make a property insurable, there is a strong argument for confirming that the system remains connected and functional.
The underwriting cycle should not determine the value of prevention
Insurance markets change, but the value of preventing losses does not rise and fall with the underwriting cycle. During a hard market, carriers become more selective because they have to. That pressure can produce better discipline around risk. The danger is allowing that discipline to fade when competition returns.
If a carrier believed an automatic shutoff system materially improved a property's risk profile two years ago, a softer market alone should not make the technology less relevant today. The same applies to other connected-home tools that can reduce the duration or severity of a loss. The better standard is simple: Does the technology give the insurer or homeowner a meaningful opportunity to prevent a loss or limit its severity?
If the answer is yes, its value should survive the market cycle.
Prevention has to become operational
The next stage of connected-home insurance will depend less on how many devices are installed and more on whether those devices remain part of the risk-management process. That means carriers should think about a few things beyond installation: Who knows when a device goes offline? Who contacts the homeowner? How quickly is the problem corrected? Does the homeowner understand that connectivity affects the protection they were promised? Is the agent reminded to reinforce that message at renewal? Those details are less visible than the initial installation. They are also where much of the protection is won or lost.
The hard market pushed insurers to experiment with new ways to manage property risk. Some of those practices were responses to extreme conditions. Others were improvements that should outlast them. Connected loss-prevention technology belongs in the second category.
A softer market may give carriers more flexibility about which homes they insure and how aggressively they compete for them. It does not make water losses less expensive or destructive. And it does not make a disconnected mitigation device work. The hard market pushed insurers to adopt stronger loss-prevention practices. A softer market is no reason to give them up.
