A New Shade of Coverage: Green Insurance

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Organic foods, hybrid cars and more energy-efficient homes are all moving into the mainstream. As Americans change their habits and lifestyles to adjust to the new greener lifestyle, manufacturers and marketing agencies aren’t the only ones sitting up and taking notice. Insurers are also getting in on the green game and focusing on customer concerns about carbon footprints and global climate change. These eco-surance policies may be new, but they’re a fast-growing segment of some insurers’ business plans. “It is really a pretty new field, but in the history of insurance, the rapidity in which this has gone from being a new thing to being a huge thing is striking,” says Howard Mills, chief advisor of the insurance group for Manhattan-based Deloitte and Touche. “It is new, but it is rapidly becoming something the industry is very focused on.” Green Homeowner’s Insurance Basics What exactly is a green homeowner’s policy? Obviously, they differ from company to company, but generally the basic idea is simple: Buy “green” coverage and if your home ever has a property damage of loss, the company will pay not only for the actual replacement costs of what was there before, they’ll pay for you to make environmentally friendly choices when you rebuild or repair. Boston-based Lexington Insurance is one of the first companies to offer greener options for homeowners who have made eco-improvements to their homes. Boston-based Lexington Insurance Company was one of the first insurers to come out with what they call “EcoSurance.” Vice President of Personal Lines David Valzania says the company prides itself on industry innovation. “Lexington is trying very hard to be the industry leader in green insurance, both for commercial and personal lines," Valzania says. “We see a market need. These products are different in their space, but we’re always looking to push the envelope and broaden the scope of our business.” Lexington offers two green insurance options. Upgrade to Green is the standard green insurance plan where if an insured suffers property damage or loss, the company pays to repair the damage with greener options. This is a change from the standard policy in which losses are replaced with the same type of product as what was damaged. For example, if a home has wind damage that tears off vinyl siding, most policies would replace with vinyl. A greener insurance policy will replace the vinyl, however, with more eco-sensitive composite wood siding, which produces fewer chemicals in production and offers greater energy-saving benefits for the homeowner. LexElite Eco-Homeowner is a more specialized policy catering to homeowners who have already made green investments in their property and who are looking for insurance that fits their specialized needs. For example, the LexElite program will not only replace something like solar panels but if the customer was producing their own power, they’ll pay the customer the funds they weren’t spending on energy bills so they don’t have to bear the burden of that financial loss. In fact, if the customer’s energy generation was so prolific they were selling power back to the energy company, the policy reimburses them for that loss of income, as well. When a Loss Means a Gain While no homeowner ever wants to experience a property loss, there is a definite silver lining for eco-minded homeowners who hold green insurance policies.

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