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Is green home insurance worth it?
Rebuild your home using environmentally friendly materials and practices.
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This home policy add-on provides extra money on your claim to rebuild or repair your home in an eco-friendly way, regardless of whether your home was green-certified to begin with. And while a greener home means savings on utility bills and taxes, not many carriers offer this coverage, and those that do limit what’s covered or how they pay the claim.
What is green home insurance?
Green home insurance extends your standard homeowners coverage so you can use environmentally friendly materials and building practices on repairs or rebuilding. The coverage can also be used to purchase energy-efficient appliances and materials to replace those that are damaged beyond repair in your claim.
How does green home insurance work?
When you make your claim for a covered event, your green updates add-on coverage automatically kicks in, adding either a set dollar amount or percentage to your existing homeowners payout, sometimes with a dollar amount cap.
For example, one insurer might add up to $25,000 in extra payout available for green updates, while another will increase your overall policy payout limit by 10% up to a certain amount.
Is green home insurance worth it?
Not everyone will want to pay extra to go green, but some policies can cost as little as $70 a year per $1 million insured. And while most coverage will have a cap on how much more you’ll be allowed to spend, some of the green products and materials covered include:
- Home systems. Coverage can help you install energy-efficient heating and cooling systems, lighting and low-impact plumbing fixtures.
- Structural coverage. Use eco-friendly, sustainable and recycled materials to replace windows, insulation, framing, roofing and siding materials.
- Electronics and appliances. Get eco-rated home appliances, home office equipment and home electronics.
- Building processes.Use this coverage to request builders who specialize in low environmental-impact building processes.
- Abatement and removal. Make sure your debris and abatement materials are dealt with in a way that is best for the environment, including reuse and recycling of home materials.
What’s not covered by green home insurance?
Every carrier has different rules about what is and isn’t covered, but you’ll want to ask about the following coverage considerations before purchasing a policy:
- Home certification. If you’re seeking U.S. Green Building Council or Leadership in Energy and Environmental Design (LEED) certification on your green home, your coverage probably won’t cover the fees and inspectors needed to have your home certified or recertified.
- Coverage caps. Many policies cap the covered costs, which means you’ll have to pick and choose where to go green and where to allow standard building practices and materials.
- Cosigned debts — such as student loans or credit cards
- Total loss. In the event that your property is damaged beyond repair, your policy may or may not cover eco-sensitive demolition and removal.
- Child care
- Newer green home technology. Not all green features have enough historical data to prove their worth to insurance carriers. For example, cork flooring or gray-water filtration may not be approved.
Case Study
The siding on Pam’s home is destroyed during a winter storm. With her green updates coverage, she gets an additional 10% over her policy’s repair maximum of $20,000 to use energy-efficient and eco-friendly siding materials.
And she can also have her installer use eco-friendly practices when removing and disposing of the old siding, such as recycling the old wooden shingles.
Compare green home insurance coverage
Bottom line
Adding green updates coverage to your homeowners or renters policy isn’t going to give you the green home of your dreams, but it can ensure that any repairs done will upgrade your home rather than simply fix the damage. The relatively low cost of this coverage makes it a no-brainer add-on for anyone committed to a green lifestyle. But with carrier options limited and different coverage levels available, it’s vital to do your homework and shop around for the policy that best meets your goals.
Common questions about green home insurance
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