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Home Insurance Perks for Green-Friendly Design

“Green” insurance is in.  If you don’t believe us, ask your insurance company if they offer perks for eco-friendly and sustainable homes.  You might be offered a much lower (or discounted) premium when they’ve learned that your house is made (or remodeled) from sustainable and eco-friendly resources.  There are even some companies that will entirely pay for rebuilding a home in the event of a loss.

What’s the logic behind this?  Studies show that “green” homeowners are more likely to perform routine maintenance on their equipment.  They thereby avoid many accidents and mishaps that would cause them to file for policy claims.

Insurance companies also know that many updated materials and systems are more efficient, cost-effective, and durable.  This helps avoid huge insurance claims typical of homes that use outdated or inefficient materials.  Here’s a case in point: 50 in 10,000 fire incidents are caused by faulty insulation, and common fiberglass used as insulation can be a fire hazard.  Green advocates often recommend cellulose as one of the best materials to use for insulation.  There was once a popular demonstration that showed how a ceiling made of cellulose insulators stayed intact for 70 minutes.  Compare this to fiber-glass, which collapsed 20 minutes after it was ignited.

Now, 70 minutes is a long time.  The average time of most firefighters is around 5 to 10 minutes travel time between the fire station and the scene of a fire.  This means that the odds of saving your home increases, and the amount of repairs needed to fix damages decreases.  Everyone’s happy in the end — including your insurance company.

There are two kinds of green-friendly insurance products offered in the market today.  The first one is for those who already meet their standards for a green discount.  For instance, you can get a discount of up to 10% when you buy a house within the last 10 years.  Studies show that new homes built a decade ago (or later) are more energy-efficient than older houses.

The second product gives discounts or lower premiums for those who remodel or repair their homes by conforming to LEEDS.

Learn about LEEDS

LEEDS is one of the most trusted rating systems for green buildings in the U.S. today.  It can be quite challenging to implement LEEDS standards, since inspectors test a home’s energy efficiency not just on one aspect of a home but in various categories:

Water:

 LEEDS requires water efficiency measures in a home, such as using low-flow WaterSense showerheads and keeping plumbing units in excellent condition.

Energy:

 Home energy performance should exceed local code requirements by at least 15%.  Buying appliances that are rated “Energy Star” can also help you get insurance discounts.  Appliances that carry this seal are certified by the EPA (Environmental Protection Agency).

Type of materials used:

 Construction waste should be minimal and products should be either recycled or sustainable.  Using eco-friendly materials such as bamboo, harvested wood, scrap metals, and other recyclable materials like steel beams when remodeling your home is also a plus.

Indoor air quality:

 Proper home ventilation is required together with high-efficiency air filters that have low energy consumption.

Land use and landscaping:

 Correct landscaping and strategic location allows homes to be conveniently located within landmark areas and other local resources and buildings.  Carpooling and walking becomes possible, which in turn helps save gas and energy use.

Awareness and Education:

 Thorough education enables homeowners to effectively use and maintain their home’s green features.
There are some insurance companies that offer extended coverage instead of discounts if your home has its own geothermal, solar, or wind energy.  When your system malfunctions, your insurance will reimburse the extra expense of buying power from another source until your system is fixed and working well.

Remember that green incentives will vary depending on your insurance company.  Premiums and discounts differ from one provider to the next, so it’s best to do your research and compare notes before you make your decision.  The more you know, the better your chances of finding a “green” policy that best suits the needs of your home.

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