Green insurance, the eco-alternative

  • Eco-policies for homeowners
  • Go green the next time around
  • Greener auto policies

Insurance innovations aren't usually glamorous or trendy. But recently, a handful of major insurance companies have "gone green," at least in their product offerings.

Those who own hybrid vehicles or green-certified homes can benefit from lower premiums on their property. And those who aspire to own a greener home can choose coverage that, in the event of a loss, will pay for rebuilding their home greener than it was before.

The question is: Does earth-conscious coverage make sense for you?

Ashley Katz, spokeswoman for the Washington, D.C.-based U.S. Green Building Council, contends that green insurance is money well spent. The organization is made up of companies, contractors and government agencies that promote sustainable building practices.

"Investing in green strategies is a smart strategy for ensuring that your home performs well, saves money and is better for the health and well-being of the home's occupants," Katz says.

Greening your insurance
  1. Eco-policies for homeowners
  2. Go green the next time around
  3. Greener auto policies

Eco-policies for homeowners

There are two types of green policies for homeowners. One covers buildings that already meet stringent efficiency and sustainability standards. The other offers the option to replace any losses incurred on the property with more environmentally sensitive materials.

Fireman's Fund Insurance Co. of Novato, Calif., was one of the first companies to introduce homeowners policies that feed into consumer desire to make homes more energy-efficient and environmentally sustainable.

For people who already own LEED-certified homes, Fireman's offers a 5-percent discount off regular annual insurance premiums. LEED, which is short for the Leadership in Energy and Environmental Design Green Building Rating System, was developed by the U.S. Green Building Council and is a recognized environmental standard in the building world.

While there are "green" homes that have not gone through the LEED certification process, using this standard allows Fireman's Fund to have a common benchmark for deciding what homes qualify for the green-property discount, says Janet Ruiz, spokeswoman for Fireman's Fund.

While this discount is certainly popular with the small customer segment that owns LEED-certified residential buildings, it doesn't apply to most people searching for homeowners policies.

Go green the next time around

For people who don't own green-certified properties, several insurers are introducing an option that allows homeowners to replace any property losses with more eco-friendly options. Farmers Insurance of Los Angeles recently introduced an option it calls "Eco-Rebuild" that will replace damaged properties with more environmentally conscious materials. This option is available as an addition -- or endorsement in insurance lingo -- to a regular homeowner's policy for $25 or 2 percent of the annual premium, whichever is more.

"There's a continuing trend for individuals to think and act green," says Jeff Reinig, Farmers Insurance senior vice president of home product management. "The Eco-Rebuild endorsement addresses this trend."


Reinig says by this summer, this option should be available to Farmers' customers in 28 states.

Fireman's Fund also offers its "Green Upgrade," which pays for a greener rebuild after a loss, as an addition to the regular homeowners policy. It's available as an addition to a regular homeowner's policy, starting at $25 annually for homes with an insured value of $350,000 or less. For houses with higher insured values, the annual additional cost is $70 per $1 million of the home's value.

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