Smart locks may key in high insurance rates

Smart locks that let retailers deliver packages inside houses or apartments with a digital code while you are away raise liability questions and could raise home insurance rates, experts said.

Amazon’s system is being tested in Detroit, Miami and Silicon Valley.

“There are a lot of questions,” said Kenneth Cantor, an attorney and the owner of Cantor Insurance Group in Southfield, Mich. “When you have homeowner’s insurance, it covers you for your property and liability. If you invite someone on your property and they steal something or knock a candle over and the house burns down, would your policy cover it?”

As technology advances, he said, policies will have to catch up, and that could mean rates will go up.

“It’s a new development, so we don’t have a lot of current experience with this,” said Jim Whittle, assistant general counsel of the American Insurance Association in Washington. The AIA is an insurance trade organization representing about 320 insurers that write more than $125 billion in policies annually.

Whittle said that as more people adopt the smart locks, and people are able to enter their homes when owners or tenants are not there, carriers have many liability questions:

What if someone gets injured — slips on a wet floor — while delivering?

What if a pet gets out or attacks the delivery person?

What if the front door doesn’t get closed?

“In any of those situations, will Amazon be held liable or will the homeowner be at fault?” said Michael Macauley, CEO of Pleasanton, Calif.based Quadrant.