There are many ways to “go green” with your home insurance: you could opt for paperless billing or pay your statement online through an electronic transfer of funds. However, you can also benefit from purchasing or renovating your home using green technologies and materials.
The insurance industry has embraced the trend to “go green” by offering specialized insurance policies which cover green homes, whether it is a newly constructed dwelling or has been renovated using green products. There are several dozen insurance coverage options now available on the marketplace.
“After years of inertia, the $16 trillion industry has begun to address climate change with mandatory risk disclosures and more products to help businesses and individuals reduce energy use. Insurers have begun to offer lower premiums on car, homeowner and property insurance for people who drive less, own hybrid cars or build green homes.”
Although insurance carriers offer green policies for both cars and homes, this article will focus specifically on green homes. This includes information on what it means to “go green”, the types of coverage available, and insurance discounts.
What does it mean to “go green”? It means building, repairing, or renovating a home using green products that were produced in a sustainable manner and/or using recycled products. Green building can also include disposing of unwanted construction materials in a more environmentally friendly manner, reducing waste, and reusing or recycling when possible.
Green home building is becoming increasingly popular. The number of green projects increased by approximately fifty percent between the years 2008 and 2010. Why are homeowners seeking out green homes and materials?
- Sustainability: The products used in building a green home usually last longer. This means you will need to replace or repair various components in your home less often.
- Safety: The home may be designed to improve the health and safety its inhabitants through features like an HVAC system that provides better air quality or using moisture-resistant materials that are less prone to mold.
- Energy reduction: Installing appliances that use less electricity, or putting in windows that help to regulate the temperature inside your home will help to reduce energy usage and lower operation costs.
- Waste reduction: A sustainably-designed home will reuse and recycle materials during both the construction and post-construction phases. For example, the home may use siding sourced from longer-lasting materials or having a rain garden to reduce runoff.
Green technologies can be used on the inside and outside of your home. For example, you could install a roof using shingles made of recycled materials like plastic and rubber. Prices are comparable to standard shingles, and you will have the satisfaction of knowing that there is less waste in the landfills and less energy used to produce the shingles. Or, you could put in windows that trap more warmth from the sun during the winter and reflect more sun away from the home in the summer. On the inside of your home, you could install energy-efficient appliances, update you HVAC system to run with less energy, or install a tankless water heater.
Some can be simple changes or upgrades, like installing a low-flow toilet which can save up to 3,000 gallons of water per year for each toilet. If you are looking to change your flooring, you could choose bamboo. It grows quickly and is therefore a sustainable resource. It’s pretty affordable too.
The insurance industry has embraced the green homes trend. It’s important to check with your independent insurance agent first before installing green products, energy-generating equipment, or purchasing a green home. They will be able to suggest an insurance policy that best fits your desire to “go green.”
There are two types of policy options available: green home insurance and green-rebuild home insurance.
Green home insurance
If you have purchased an eco-friendly home, you may be eligible for coverage under a green home insurance policy. Homes are considered “green” if they comply with the standards set by the Leadership Energy and Environmental Design (LEED) organization. They set ratings based on the products and constructions methods used during the build. Some insurers may use Energy Star or Green Point ratings instead of LEED. If you experience a loss on your home, the policy guarantees to cover the costs to rebuild using green materials.
Before you buy a green home, speak with your insurance agent about your plans. Bring them documentation proving the LEED-certification for the home. Your agent will be able to determine whether or not the dwelling would qualify for a green insurance policy.
Green-rebuild home insurance
If you do not have a green home, there’s still an option for you. If you experience a loss and want to make upgrades and improvements using green materials, you may want to consider green-rebuild home insurance. The green-rebuild policy allows you to install green products up to a certain dollar amount over a standard rebuild.
There is no need to purchase separate coverage for your newly remodeled green home. Rather, your independent agent can help you add an endorsement to your pre-existing standard homeowners insurance policy. The cost of a green-rebuild endorsement only costs an average of 25 dollars or 2 percent extra on your annual premium.
Another modification to your standard homeowners insurance that you might want to consider is called green energy liability. This is for individuals who have installed solar panels, wind turbines, or other energy generators. Depending upon state and local requirements where you live, you may need to have additional home liability insurance.
If you have already upgraded your home using green materials, contact your independent agent as soon as possible. Let them know about the improvements you’ve made to your home, bring in documentation proving that you have made green renovations, and talk to them about your existing coverage. You may need to modify your policy to account for your green renovation. In the future if you experience a loss, you’ll want to have enough coverage to rebuild with similar green products.
Speak to Your Agent
Speak to your agent today and select a green home insurance policy that is right for you. Some insurers offer green home discounts on insurance policies. This can range between five and ten percent off your annual premium rate. To qualify, your independent insurance agent needs to verify that your home was built or renovated using green products.
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