Green home insurance

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.

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

• If I repair my home with green home insurance can I get a discount on my homeowners policy?

  Yes, depending on the insurance carrier. Some insurers discount your premium by 5% or more if your home gets a LEED certification for environmental responsibility, or if you are using energy-efficient appliances or materials in your home.

• Does green home insurance only apply when damages cause a total loss?

  No. You can use this coverage on any covered claim, whether you need to rebuild, replace a damaged appliance or replace stolen electronics.

• Are there discounts I can use to offset the cost of green home insurance?

  That depends on the insurance company. Some carriers will offer discounts for installing smart home devices, such as a smart thermostat, which can help you increase the efficiency of your heating and cooling system. But make sure to check with your insurance agent before making any upgrades to your home.

• Will green home insurance help me install solar panels or a windmill on my property?

  No. But if you end up doing a full rebuild of your home, you may be able to integrate off-grid energy as part of your green updates. As always, check with your insurance carrier to make sure you know what’s covered and if there are exclusions. And be aware that you may need additional liability coverage if you ever plan to sell reserve solar or wind electricity back to the utility company.