Can Going Green Save Home Insurance Costs?


It’s hardly a secret that insurers are willing to give owners of hybrid and other fuel-efficient cars a break on car insurance. But are they taking the same green path on home insurance? It sure looks that way.

Enviromentally-conscious consumers are looking for businesses that adhere to their “green” principles and insurance companies know it. For years now, Travelers Insurance (Stock Quote: TRV) has offered insurance discounts to drivers of hybrid motor vehicles of up to 10% of the entire policy.

That program ran so well that Travelers is now out with a homeowners’ insurance policy that cuts 5% off your insurance if you buy a LEED-certified home.

"LEED" is a clinical housing term for green. According to the U.S. Green Building Council, LEED is “an internationally recognized green building certification system, providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts.”

There could be additional savings in LEED-approved homes. The Council also estimates that green homeowners can save 40% in energy usage, compared to traditional homes. Throw in efficient plumbing, drought-tolerant landscaping and water-conserving irrigation systems, and homeowners can not only save money on their homes, but insurance companies are more likely to reward them with price breaks on home insurance.

But there are some rules to follow. Insurance companies like Travelers are much more likely to give green home insurance discounts to regular customers. If you have your auto and liability insurance with the company, you can likely cut a deal on your homeowners insurance if you recycle, own green appliances, have “natural” ventilation and use toxin-free building materials that help cut indoor air pollution.

What can you do to make your home more environmentally efficient — and save money on your home insurance policy in the process? Fireman’s Fund Insurance is out with a list of steps to accomplish just that task:

  • Install hard-surface flooring rather than carpeting to protect indoor air for the long-term. If you decide to go with carpeting, you can now find products that meet the Carpet and Rug Institute's air quality standards for low emissions through its Green Label program.
  • Ask for carpet manufacturers with recycling programs; many will accept used carpets for recycling or remanufacture. An estimated 5 billion pounds of carpet goes to landfills annually because its synthetic components prevent easy recycling.
  • Request paints that do not use volatile organic compounds, known as VOCs, which are used in paints, lacquers and cleaning supplies. VOCs emit gases with significant health effects. Low- or no-VOC paints (and cleaning products) are now widely available.
  • Ask your contractor to make recommendations as other common sources of indoor air pollution include cabinetry and insulation (formaldehyde), improperly vented fireplaces and poorly installed or maintained heating and cooling systems or home appliances, such as gas ranges, stove hoods or water heaters.

Once you’ve crossed one or two of those items off your list, call your insurer and let them know that you’re taking green steps to protect your home — then ask them about that homeowner's discount.

Chance are, you’ll get it.

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