green home insurance

Green home insurance is available in many different forms. Here we look at how these policies work, how to find a good deal and how to lower premiums.

What is green home insurance?

The basic purpose of green home insurance is the same as a conventional home insurance policy – both are designed to help you cover the cost of damages caused by an insured event (subject to policy exclusions). Buildings insurance covers the structure of your home as well as its permanent fixtures and fittings, and may also incorporate outbuildings, underground pipes and cables, and even glass in doors and windows. Contents insurance meanwhile, covers the items you keep within a home such as your furniture, carpet, electrical items, clothing and so on. Cover is usually available either on a ‘new for old’ basis, meaning you receive a brand new replacement for any damaged items; or on a ‘wear and tear’ basis meaning a percentage of what you paid is deducted for depreciation.

However, there are also many aspects of green home insurance that differ from regular policies. In fact there are even different types of green home insurance available, such as:

- Climate neutral home insurance: Offered by the likes of the Environmental Transport Association and RK Shipman, this allows you to offset your home’s emissions which, on average, equate to six tonnes per household every year. The idea is that the carbon dioxide (CO2) and harmful gases emitted by your home are compensated for because the home insurance company provides financial assistance to projects such as forest restoration, methane capture, energy efficiency and the development of renewable energy.

- Conventional green home insurance: While climate neutral home insurance is generally offered by specialists, you may be able to benefit from green incentives from conventional home insurance companies. These can include cover options such as incentives for homeowners to install green appliances and equipment following an insured event; rebuilding with environmentally sound materials; and discounts to homeowners that improve the energy efficiency of their homes, such as by installing loft insulation, solar panels and cavity wall insulation.

Some specialist green home insurance companies claim that they can offer more competitive deals than conventional home insurers because they recognise homeowners that take steps to reduce their carbon emissions are also less likely to make a claim on their policy – for example, they are less likely to smoke, which reduces the risk of home fires.

So is green home insurance the right option for you?

If you strongly believe in doing your bit for the environment then a green home insurance policy could be tempting – however, there are some important factors to consider before opting for one of these deals.

Firstly, carbon neutral schemes, and cover that uses environmentally friendly building products in the event that repairs are needed to your home, may be more expensive than regular policies. Even though discounts may be available if you have improved the energy efficiency of your home, the cost of these policies may still outweigh those from conventional insurance companies.

You should also consider the level of cover available. Cover options can vary widely between companies regardless of green incentives and you should ensure your policy offers suitable cover depending on your circumstances – for example, is there cover for personal possessions that you take outside the home, how much cover applies to garden contents, and so on.

Consequently, it’s best to compare as many policies as possible before deciding on the right deal for you. The leading comparison websites can compare quotes from as many as 65 home insurance companies ensuring you’re getting value for money. If you find a deal from a conventional insurer is significantly cheaper than a policy from a green home insurance company you could even use the money you save to put towards a green project of your own choice.

How can you save money on green home insurance?

If you are willing to pay a little extra for a green home insurance policy then it’s worth looking for additional ways to bring your premiums down, such as:

- Buy online: Many home insurance providers offer discounts to customers that take out policies online due to the savings they make on overheads.

- Combined policies: Taking out buildings and contents insurance with the same provider could earn a discount.

- Green incentives: Look for green discounts – you may be rewarded for installing loft insulation, cavity wall insulation and other energy saving features.

- Increasing security: Most home insurance providers offer discounts if you increase the security of your home with burglar alarms, time-switch lights and security lighting. Five-lever mortise locks on doors and key operated locks on windows could also earn discounts from an insurer.

- Increase your voluntary excess: The excess is your contribution towards a claim – setting it at a higher level will usually lower premiums although you should be careful to keep it at a level you can comfortably afford.

- Prevention of fires: Smoke alarms, fire extinguishers and even quitting smoking could lower your home insurance premiums.