We live green at home because we’re conscious of our environmental footprint. We recycle, install solar panels, use green building materials and replace windows with energy-efficient models. But how does living green impact home insurance — or does it? *Gasp.*
Every insurance company differs in their approach to home insurance impacts. “Some will actually increase your premium if you install solar panels, arguing that it increases home value and adds risk. Others will lower those costs based on the assumption that environmentally friendly homeowners are more responsible in general and therefore safer to insure,” says Jonathan Deesing, a home solar specialist with Solar Power Authority.
Your home insurance can change when raising your pad’s eco factor, but check with your insurance agent first to see what your insurer’s policy says.
If you’ve done more than just a few upgrades, you may want to consider a green policy. The first green insurance policy was offered back in 2006, and since then, insurance coverage has expanded to dozens of companies and coverage options. The National Association of Insurance Commissioners says the first green homeowner’s policies could only be purchased for new homes certified as meeting climate- and zone-specific construction standards for energy. Today, green homeowner’s policies cover varying degrees of green repairs.
A green homeowner’s policy covers everything from restructuring a damaged home to upholding green standards. While there is a cap on covered expenses, some policies even allow you to repair your home using green materials. Other policies might exclude inspector fees to have your home certified or re-certified green.
What’s more, green buildings are generally less risky to build (and thus safer for insurance companies) because they require so much care and revision at the planning stage. So adapting some green tech home upgrades can actually help homeowners avoid costly home insurance claims and keep premiums low. With that in mind, here are some home insurance impacts to consider:
New energy-efficient appliances use less water and energy, and this typically reduces the chances of water or electrical malfunctions that are common in older appliances. Clothes washers, refrigerators and even cable boxes can qualify. By upgrading to these greener appliances, you reduce your risk of flooding and fire damage in your home.
Insurance companies issue discounts of as much as 20 percent to homeowners who are installing home monitoring systems, according to SafeWise. Why? Certain censors are now capable of shutting off water sources when excessive water is detected, while smoke detectors can automatically alert the fire department if smoke exceeds a given level. This smart home technology is capable of quickly reducing serious damage to homes and avoiding large insurance claims in the process.
One of the first upgrades to earn discounts among insurers are ENERGY STAR-qualified windows, doors and skylights because of the energy savings the offer — 12 percent nationwide on average. Plus, they also may qualify for up to a $500 tax credit.
Updates such as energy-efficient plumbing, newer electrical systems, an energy-efficient roof and similar green renovations may also warrant big savings with your insurance provider.
Many policies offer sweet home insurance impacts for solar upgrades. According to a Wall Street Journal report, several companies offer consumers up to a 5-percent discount on a homeowner’s policy if they install solar energy to generate electricity such as rooftop solar panels or energy-saving geothermal heat pumps that meet the ENERGY STAR Program requirements.
Paying an expert to conduct an energy-efficiency audit of your home is a great way to unearth home insurance impacts you might otherwise overlook. “Since every homeowners insurance provider is different, the first step to seeing what discounts you may qualify for is to contact your homeowners insurance agent and find out the details of what is needed to qualify for a discount,” says Joel Ohman, CFP, founder of Insurance Providers.
If your home is already certified “green” by the Leadership in Energy and Environmental Design (LEED), you may be eligible for a home insurance discount with certain carriers. Whichever green living upgrades you add to your home, be sure to look into the home insurance impact offered by insurers in your area. In the end you may come away with more than just a green environment: actual greenbacks to tuck into your environmentally friendly faux leather wallet.