Green insurance, the eco-alternative

So what does a policy mean when it offers to rebuild a home greener than before?

Reinig explains that in the event of a covered loss, the Eco-Rebuild endorsement means Farmers will pay extra to replace your old kilowatt-hungry appliances with Energy-Star devices and recycle debris rather than send destroyed materials straight to a landfill. The Energy-Star label means the appliances meet an energy-savings rating created by a joint program of the U.S. Environmental Protection Agency and the Department of Energy.

Greener auto policies

For owners of hybrid vehicles, saving the Earth and saving money are sometimes as high a priority as saving on gasoline. For these consumers, a handful of companies are offering discounts that make it a sound option for drivers to own these fuel-sipping vehicles.

"Offering these environmentally friendly policies fits with our corporate philosophy as well as a lot of our customers' personal philosophies," says William Pearse, vice president of auto product strategy and design for Traveler's Insurance of Hartford, Conn., which was one of the first companies to offer discounted insurance rates for hybrid autos. The company also has introduced a discount insurance program for hybrid or electric boats.

Even so, most insurance companies charge higher premiums for hybrid vehicles because of the cost associated with replacing expensive components like the nickel-metal-hydride batteries that provide some of the power for hybrids, Pearse says.

An unanticipated effect has been that Travelers has seen a lower incidence of losses from owners of hybrid vehicles. "They're exhibiting a responsibility by owning a hybrid, and that seems to cross over into more responsible driving habits," he says.

Farmers also offers a discount for hybrid drivers of up to 10 percent of the policy's annual cost. Brian Dwyer, senior vice president of auto product management for Farmers Insurance Group, says the company has found that drivers of hybrid vehicles tend to be more mature, more environmentally conscious and drive fewer miles than other motorists. Because they cause fewer accidents, the cost of replacing the expensive hybrid parts is more than balanced out by their "preferred" status as insured.

The bottom line with green auto insurance is fairly straightforward: Finding a company that offers discounts for hybrids is a good move for owners of these eco-smart cars. Regardless of whether your hybrid is an economical Prius or a luxury hybrid Lexus RX, Farmers and Travelers offer a discount of up to 10 percent off a normal policy, depending on individual insurance histories and state regulations.

If you're hoping to score a greener insurance policy for your home, vehicle or even your boat, call your current insurer and ask if any discounts are available. And as you should do anyway, shop around and see who gives you the most bang for your insurance buck. Howard Mills, chief adviser for the insurance group at Deloitte & Touche USA LLP, says insurers are increasing their offerings of climate-change-related products, including incentives for customers who have, or want to have, greener homes and vehicles.

"My sense is that the insurance industry feels this isn't going to be a fad," Mills says. "This isn't something that's going away in a couple of years. It's driven in demographics with younger consumers who will be purchasing insurance products for years to come."


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