This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeownersInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.
Green building practices do more than protect the environment, and smart homeowners have more than energy savings to gain when they strive to comply with LEED requirements. Homes built with sustainable, energy-efficient materials are proving to be less vulnerable to wind, hail and water, making them better investments for homebuyers and more attractive to insurers seeking to lessen risk. This could mean lower insurance premiums for homeowners who take steps to increase their homes’ sustainability.
Shelter from the storm
Extreme weather is nothing new to Louisiana, but the devastation wrought by Hurricane Katrina was particularly severe. The need to rethink building practices became all too clear overnight. If there is a silver lining to be found in the Katrina disaster, it’s that those communities devastated by the hurricane have had – and still have – the opportunity to rebuild in such a way that should make them better able to withstand the next storm that blows through.
The Insurance Information Institute (III) reports an average cost of more than $6,000 to mitigate an insurance claim caused by severe weather. According to the III, Hurricane Katrina cost $16.2 billion in insurance claims, averaging $96,821 each. Consider how much lower this might have been if more homes and businesses had been built using impact-resistant roofing materials such as aluminum or steel that can withstand not only fire but wind, hail and flying debris. Some insurance companies already offer premium discounts to Louisiana homeowners who install these roofing upgrades.
It pays to upgrade your home
Water damage claims typically cost insurance companies around $7,000, according to the III, and make up almost 25% of homeowners claims in the U.S. In an effort to bring this average down, some insurance companies may offer lower premiums for homes that earn Indoor Water Efficiency points by complying with the LEED v2009 requirement of 20% water savings.
Following are some other upgrades that could lower your homeowners insurance costs:
- New plumbing systems
- Updated HVAC systems
- Modernized electrical systems
Updating these systems in your home can help you avoid expensive water damage, mold and fire claims. Insurance companies recognize that you are lowering your chance of filing claims and are likely to reward your efforts.
The benefits of green building are so great that some homeowners insurance companies now offer green replacement coverage for standard homes. If a non-LEED certified home is damaged or devastated by covered peril, green replacement covers the cost to rebuild using sustainable, energy-efficient materials.
Savvy homeowners know that saving energy and materials are the underlying reasons to go green. But they also understand that the value of sustainable building goes beyond those savings. One way you could realize that value is by lowering your home insurance risk, which could mean lower home insurance premiums.