For a Green Home, You'll Want this Coverage

NEW YORK (MainStreet) — A new trend in homeowner's insurance policies is green coverage, which allows homeowners to rebuild a damaged home to green standards by covering the costs of environment-friendly materials and energy-efficient replacement products.

"The advantages include a possible reduction in premium if the home being insured is already considered green. These policies typically cover the higher costs associated with green building," said Samantha Reeves, senior mortgage and home buying professional with Veterans United Home Loans. "The downsides are that there may be limits on how much is covered and it's still relatively new on the market."

Not every state offers green homeowner's insurance.

"Green homeowner's insurance is a niche area," Reeves told MainStreet. "A potential homeowner interested in green homeowner's insurance should get several quotes for green and standard homeowners insurance and then make an educated decision on what policy will best meet their specific needs."

Other ways to secure lower rates include installing a safety alarm and deadbolts, installing a locking fence around swimming pools or hot tubs, replacing an old or worn roof, upgrading plumbing and electrical systems and purchasing both home and car insurance through the same company.

Those in Florida, Texas and Louisiana may want to snag as much savings as possible given that those states have the highest homeowners insurance premiums in the nation, according to the National Association of Insurance Commissioners, which pinned Florida's rate at $1,534 annually.

That's because insurers typically charge more for policies where there is a higher risk of catastrophic damage from hurricanes, tornadoes, ice, hail storms and wildfires.

"Insurance companies love safety and hate danger, so they're often willing to offer lower rates to customers with well-made homes in safe areas," said Jessi Hall, a home buying consultant for Veterans United Home Loans in Columbia, Missouri.

"Not every company is licensed to operate in each state," said Michael Barry, vice president with the Insurance Information Institute. "You should buy from a company licensed in your state because then you can rely on your state insurance department to help if there's a problem."