A hacker bypassed my August Smart Lock, deleted the logs, and burgled the guest while they slept. The guest is suing me for “failure to secure the premises” and data privacy breach (their codes were stolen). My homeowner’s policy covers “physical forced entry,” but since there was no broken window, they are calling it a “Cyber Event” and denying the claim.
Key Takeaways
- Physical vs. Digital Entry: Standard theft policies require “signs of forced entry” (broken lock/window). A hacked code leaves no physical marks, leading to claim denial.
- Cyber Liability: You are collecting data (names, codes, maybe Wi-Fi usage). If that is breached, or if your smart home tech harms a guest, you need “Cyber Liability” coverage.
- Firmware Negligence: If you didn’t update the lock’s firmware, insurers can argue you failed to maintain the security system.
- Airbnb’s Role: Airbnb pushes smart locks but takes no responsibility if the third-party hardware fails or is hacked.
The “Why” (The Trap)
The trap is the “Cyber Exclusion” and “Forced Entry Requirement.”
Home insurance is 20th-century tech applied to 21st-century problems. It understands a crowbar. It does not understand a brute-force attack on a keypad. Unless you have an endorsement for “Cyber Protection” or “Smart Home Liability,” digital break-ins are often uninsured.
The Investigation: I Called Them
- State Farm: “If there’s no physical damage to the door, it’s very hard to prove theft under a standard policy. It looks like ‘Mysterious Disappearance’.”
- Proper Insurance: I asked about “Cyber.” They offer a “Cyber Liability” add-on. It covers extortion (ransomware on your smart home) and liability if a guest is hacked via your system.
- HSB (Hartford Steam Boiler): They sell standalone “Home Cyber Protection” that can be added to some policies. It covers data recovery and cyber bullying, but check if it covers guest liability.
Comparison Table: Smart Home Coverage
| Feature | Standard Homeowner | Proper / Commercial Cyber | Standalone Cyber Policy |
| Hacked Lock (No Force) | Excluded | Covered (Theft/Cyber) | Covered |
| Guest Data Breach | Excluded | Covered | Covered |
| Smart Tech Restoration | Excluded | Covered | Covered |
[IMAGE: Screenshot of a smart lock app showing ‘Admin Access’ log at 3:00 AM from an unknown IP]
Step-by-Step Action Plan
- Enable Two-Factor Authentication (2FA): Turn this on for your smart lock app immediately.
- Auto-Update Firmware: Go into settings and ensure “Automatic Updates” are ON.
- Physical Backup: Install a “Deadbolt Guard” or a secondary manual lock that guests can engage from the inside while sleeping. This prevents digital entry.
- Buy Cyber Coverage: It’s cheap (often $50/year). Ask your broker to add “Cyber Liability” to your host policy.
FAQ
If the Wi-Fi goes down and they cancel, does insurance pay?
No. Service interruption is not a covered peril unless a storm knocked out the lines physically.
Can I view the smart lock camera?
Only if it’s outside. If you have a smart lock on a bedroom door with a camera, you are violating privacy laws.
Are keypads safer than keys?
For insurance, keys are safer because a picked lock leaves scratches (physical evidence). Keypads are convenient but harder to insure against “phantom” entry.