Home Insurance Policies That Offer Green Home Discounts
Are these eco-perks worth it?
Insurance companies often provide discounts and incentives that save you money, although the offers usually vary based on your location and other factors. You may already be familiar with home insurance discounts for having multiple policies and installing home protection devices, but you may also be able to save with green home discounts that reward eco-friendly home features.
Let’s take a closer look at how green home discounts work, which companies have the best green discounts, and more.
How Do Green Home Discounts Work?
Some insurers promote sustainable building practices by offering discounts for homeowners who make certain improvements. While eco-friendly home insurance discounts aren’t exactly common yet, if your home has environmentally efficient features or green home upgrades, it’s worth asking your insurer if you qualify for a discount.
Eco-friendly home improvements that might fetch a discount range from smaller upgrades like switching to smart home devices, such as a smart home water sensor, to larger ones like installing Energy Star-rated appliances. Homeowners looking to do a complete home remodel might choose to go green by conforming to reputable green home standards like LEED, which we’ll discuss below. Depending on your insurer’s policies, you may need to submit proof like receipts or certifications.
A standard home insurance policy may not cover the replacement costs of green home upgrades. In addition, solar panels and wind turbines may not be covered, or may significantly raise your premiums. Read your policy’s terms and talk with an agent to confirm your coverage before investing in pricy upgrades or starting a renovation.
The Most Common Green Insurance Incentives
The two types of green discounts you’ll see most frequently are for:
- LEED-certified homes: LEED stands for Leadership in Energy and Environmental Design Green Building Rating System. It’s a recognized environmental standard developed by the U.S. Green Building Council, which encourages the design of efficient and sustainable homes. LEED-certified homes receive a certification, which you can then submit to insurers as proof of conformance to get your green discount.
- Eco-friendly products: Switching to Energy Star-rated appliances or smart home products that make your home more efficient might give you a discount on your home insurance. Other smart home products that take action when one of your home’s systems goes awry, like intelligent water sensors that shut off water sources when leaks are detected, might also earn you a home insurance discount.
Whether you have a green home or not, many home and auto insurers will give you a discount for making green policy choices like choosing paperless billing. And if you’re rebuilding your home after a covered loss, some insurers may pay you extra to recycle your debris instead of sending it to the landfill.
Green Home Discount Insurance Costs and Savings
If you have a LEED-certified home, you might be able to get about a 5% discount on your home insurance premium. With the national average homeowners insurance cost reported to be $1,211 per year in 2017, the latest year for which data is available, a 5% discount works out to an annual savings of $60.55. That might not seem like enough to convince you to completely remodel your home to obtain LEED certification, but consider that you’d also save money and resources in other ways, like through lower energy costs.
Some insurers offer green home endorsements, which don’t require LEED certification. These endorsements mean the insurance company may reimburse you for the added cost of rebuilding your home with green materials or products after a covered loss. It’s best to check your policy terms and talk with an agent about your coverage needs if you’re interested in this kind of endorsement.
The most common green home insurance discount, and the easiest one to get, is simply to have a paperless policy. You likely won’t save a lot with this strategy, but every little bit counts, and it’s a lot easier than renovating your home or replacing all your appliances.
Insurance Companies With the Best Green Discounts
Below are our top three picks for home insurance companies with the best green discounts. We focused our search on established national insurers to make this guide more helpful, and compared green home discount offerings to select our top choices.
Homeowners whose house or condo is already LEED-certified can get 5% off their home or condo insurance. Travelers also offers an optional green home coverage that helps cover the added cost of replacing, repairing, or rebuilding with green materials after a covered claim.
Farmers offers discounts for having green certifications like Energy Star and LEED. However, you must choose between a discount for having a green certification, protective devices, home safety features, or a smart home system, as Farmers only allows you to have one of these four discounts. It may be worth comparing quotes with each discount to see which one offers the biggest savings. Farmers also offers an optional Eco-Rebuild coverage for up to $25,000 toward the cost of making green replacements after a covered loss.
American Family Insurance
Small eco-friendly changes can also help you save on your home insurance premiums. American Family Insurance offers a discount if you have a smart thermostat or a smart water sensor that shuts off water sources when they sense a leak or unusual water flow.
The Bottom Line
More homeowners are gravitating toward greener homes because of higher energy savings and the reduced environmental impact. But you may also be able to reap the reward of lower home insurance premiums through green home discounts.
To get the best overall value on your policy, you’ll want to speak to your current insurer about whether it offers any green home savings, as well as shop around and compare quotes. If you’re looking into green home improvements, consider their cost against the savings you’ll receive on your home insurance as well as your energy bills as you weigh the potential return on your investment.