Eco-friendly Homes and Insurance: How Green Upgrades Affect Your Coverage

Making your home more environmentally friendly can be a rewarding venture that may provide positive impacts beyond your own property lines. However, any major changes in your home can have significant effects on your insurance coverage. Given the importance of maintaining sufficient homeowners insurance, you should understand how going green may impact your needs and costs. At Ace Insurance Consultants, we have the knowledge and experience to help.

How Can Environmentally Conscious Changes Impact Insurance?

When considering making your home more eco-friendly, you may have several options, each potentially carrying major insurance-related implications. Consider how the following common upgrades and updates might require changes in your homeowners insurance policy:

• Solar panels—Generating your own energy can help lower your long-term costs and make your home more environmentally friendly. However, this equipment typically carries significant value and may enhance your risk profile in the eyes of insurance carriers. On the other hand, solar panels may also qualify your home for discounts. Make sure you inform your insurer about your intentions and discuss coverage options.

• Geothermal heating—This alternative option for heating your home can contribute to reduced fossil fuel consumption. However, like solar panels, these environmentally friendly upgrades can carry significant costs, which must be factored into your home’s coverage limits.

• Smart home devices—Smart devices may also increase the value of your home, but they can also decrease your perceived risk levels. For example, smart smoke detectors might automatically contact the fire department, and smart water leak detectors might identify an issue far earlier than you would have detected it, thus limiting damage. As such, insurers may offer discounts for such technology.

• Additional structures—Growing your own fruits and vegetables in a greenhouse or keeping backyard chickens can be enjoyable eco-friendly solutions. However, these additional structures must be accounted for in your insurance policy.

• Green building materials—Using environmentally friendly materials on certain parts of your home can also impact your insurance. These materials may cost more, necessitating greater coverage limits. Additionally, certain features, such as a thatched roof, may carry greater fire-related risk, potentially increasing your perceived risk levels and costs.

We’re Here to Help

Contact Ace Insurance Consultants today to discuss eco-friendly homes and available coverage options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.