A system for automatic detection of inefficient household thermal insulation includes a server module and a plurality of household client modules. The system performs the following steps: acquiring data relating to each monitored household; identifying periods of HVAC down-time and determining indoor temperature gained during these periods; extracting parameters of temperature gain, relating to the measured rate of temperature gain during the down time; training a machine learning algorithm, to create at least one classification model, wherein all monitored households are classified according to the parameters of temperature gain; producing expected values for parameters of temperature gain per each household, according to household's class membership; producing the ratio between the expected and measured values for parameters of temperature gain per each monitored household; comparing the ratio among similar households; and identifying inefficiently insulated household according to the comparison.