Wearable Devices, Insurance and You

05/09/2016 04:34 pm ET Updated Dec 06, 2017

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Wearable technology has become an increasingly popular trend over the past few years, providing consumers the chance to live happier, healthier and more convenient lives. These technologies are becoming so popular that the global wearable market is expected to grow to $34 billion by 2020.

So as wearable technology continues to expand, how can you adequately protect yourself?

Below, I discuss how wearable devices and monitoring technology impacts consumers, as well as future insurance implications stemming from the information consumers provide.

How Technology Magnifies Personal Privacy and Data Risks

Twenty percent of Americans own at least one wearable device.

As "smart" technology continues to evolve, the capacity to host valuable (yet personal) information becomes endless. From exercise and health habits, to credit card and email information, wearable technology has the potential to host it all.

Advancements in the capability to store information increases the risk consumers face for data breaches of their privacy and personal data. For example, if a hacker gains access to an individual's wearable fitness band, they can track their victim's every move. Hackers can obtain valuable insight from where someone lives to their everyday morning routine.

Before purchasing the latest and greatest in wearable technology, consider the associated risks and how to effectively protect yourself. Consumers must evaluate their level of, and tolerance for, risk with their insurer to receive comprehensive consultation and coverage, should they experience some form of data breach.

Insurance Implications of the Future

The insurance industry will need to stay up-to-date with wearable device trends, shifting the way they create products and pricing structures, and how they are applied to an individual's insurance programs. New tech opens up a window of opportunity and considerations to evaluate the future of insurance and technology--some good, and some bad.

What's more, wearable tech offers insurers the chance to create add-value services through new products. Products like Google Glass and Progressive Snapshot can provide insurance agents with more information, should a driver be involved in an accident, allowing for immediate assistance and better assessment of damages.

Wearable health and fitness technology, such as Fitbit and Apple Watch, also provides us with an opportunity to give the insurance industry enhanced insight on a policyholder's wellbeing. Insurers can better assess and evolve policies based on their client's health insurance needs when they have access to more detailed information during the evaluation process.

Although there is much potential to enhance the insurance industry, there are some new exposures that should be considered.

One area for opportunity is the need for insurance protection, should wearable technology be compromised and leave the consumer exposed to risk. The insurance industry will need to develop solutions that help protect individuals, and determine policyholders' risks based on the type of information devices are storing and how vulnerable they may become if this data is obtained.

Other critical factors are health and safety risks associated with the actual devices. Although many wearable devices promote a safer, healthier and happier lifestyle, some may cause risks--such as dizziness and distracted driving--thus increasing a consumer's liabilities and vulnerabilities.

Technology can be a great addition to an individual's life, but only if the proper precautions and protection are appropriately associated with them. Learn how you can protect yourself as technology rapidly advances by downloading a free copy of INGUARD's latest ebook, "Smart Homes, Smarter Insurance."

Note: A version of this article appeared on www.INGUARD.com.