Overview
The Internet of Things (IoT) brings convenience and automation to everyday objects, from thermostats to TVs. At the same time, some products raise privacy, security, or practical concerns that mean they may be better left offline or limited in their connectivity.
This article reviews common consumer devices that can cause friction when connected, explains the privacy and risk trade-offs, and offers practical steps for protecting yourself and your property.
Key takeaways
- Not every device needs constant internet access; consider whether connectivity adds real value for you.
- Connected devices can introduce privacy and security risks that may not be covered by standard policies.
- Simple controls—firmware updates, strong passwords, network segmentation—reduce most risks.
How it works
IoT devices typically use sensors and firmware to collect data, then send that data to cloud servers for analysis or remote control. That flow enables features like remote monitoring, automatic updates, and voice interaction.
Data transmitted by devices can include usage patterns, location, audio or video, and diagnostic logs. Manufacturers or third-party services often retain some of this data, and that retention can create privacy concerns if not clearly disclosed or secured.
What it may cover (and what it may not)
Some damages caused by connected devices—physical fire, water damage, or property loss—are often addressed under home or renter insurance policies as property damage. Liability for harm to others caused by physical malfunction may also be covered, depending on your policy.
What insurance typically does not cover are privacy breaches, lost personal data, or reputational harm resulting from data leaks; specialized cyber or identity-theft coverage is usually required for those risks. Always review policy language or ask an agent about cyber and privacy endorsements for consumers.
Common mistakes to avoid
Assuming every smart feature is necessary. Many “smart” modes are conveniences, not safety features; disable ones you don’t use.
Using default passwords or failing to update firmware. These are the most common causes of IoT compromise.
Connecting too many devices to the main home network. If a camera or appliance is breached, a segmented guest network limits exposure.
Questions to ask an agent
Will my homeowner or renter policy cover damage caused by a malfunctioning connected device, and are there limits or exclusions for electronic failures?
Do you offer or recommend a cyber or identity-theft endorsement that would respond to data breaches stemming from consumer IoT devices?
Are there documentation or security practices you recommend I follow to make a claim smoother if a connected device causes a loss?
If you want help comparing options or adding a cyber endorsement, you can talk to an agent for details specific to your situation.
Next steps
Inventory your smart devices and note which features require internet access. For devices you keep online, enable automatic updates and change default passwords to strong, unique ones.
Segment IoT devices on a separate Wi‑Fi network or guest SSID to reduce the chance that a compromised device exposes sensitive home systems or data.
Review your homeowner, renter, or specialty cyber policy to see what incidents are covered and consider a cyber endorsement if you keep devices that collect sensitive personal information.
Frequently Asked Questions
Are smart devices insured if they cause a house fire?
Physical damage caused by a device may be covered under standard homeowners or renters insurance, but coverage depends on the cause and policy terms.
Does homeowners insurance cover data stolen from my smart devices?
Most standard policies do not cover data breaches; a cyber or identity-theft endorsement may be needed for that protection.
How can I reduce the privacy risk from a connected camera or microphone?
Limit data retention, disable always-on features you do not need, apply firmware updates, and place such devices on a segregated network.
Should I unplug devices when not in use?
Unplugging or disabling internet access for devices you rarely use is an effective way to eliminate remote-attack risk and protect privacy.