Occasionally at Green Compliance Plus, we host guest articles from members of our community. Here is one perspective from the Insurance Industry.
People who are building or already own sustainable homes understand that their homes will use less energy and water. What they might not realize is that their homes also are much safer than conventionally built homes. Or that the enhanced safety features can result in less risk for home insurers and better rates for coverage.
That’s true whether the houses are certified by Leadership in Energy and Environmental Design, ENERGY STAR for New Homes, Enterprise Green Communities or another authority. Here are some of the features of green homes that make them sustainable and how they reduce risk for home insurance providers.
Steel and aluminum roofs
Many people seek LEED certification for their homes in part by installing roofs that use steel or aluminum – both of which are highly reflective, energy-conserving materials – on at least 75% of their roof’s surface. But in addition to those qualities, roofs made of steel and aluminum are more fire-resistant and stronger.
This matters because severe thunderstorms caused nearly $15 billion in insured losses in 2012, according to the Insurance Information Institute. More durable roofs aren’t nearly so susceptible to storm damage, meaning they don’t carry nearly the risk of conventionally built ones. That could easily mean lower insurance premiums for the sustainable homeowner.
Modern electrical systems
Green homes feature electrical systems designed for energy efficiency. But these modern systems also result in less risk of fire. The National Fire Protection Association has statistics that show what this can mean: There are nearly 500,000 structure fires every year, with a residential house fire breaking out every 82 seconds.
In many cases, the cause for these fires is assigned to faulty electrical systems that depend on outdated fuse boxes, ungrounded power outlets and other problems. The cost is staggering – the average claim is about $30,000. Because they are newer and use safer technology, sustainable energy systems are much safer than older conventional systems.
Updated heating and cooling systems
Modern heating, ventilation and cooling systems result in a number of points for green certification programs because they use less energy and produce better air quality. But again, they also have side benefits that contribute to safety.
Consider that another chief culprit in electrical fires is the failure of air conditioning systems. The NFPA says such failures contribute to about 2,500 home fires every year. Heating system failures in winter can lead to frozen pipes that can burst and cause costly water damage in a home. Updating these systems greatly reduces the risk of fire and water damage from seasonal weather.
Many homeowners seeking green certification install water-efficient toilets and other plumbing that uses less water. Again, that also reduces the chance of a leak or other malfunction that could lead to water damage in a home. The III reports that water damage claims make up nearly 25% of home insurance claims, with an average cost of $7,000 each.
Cutting these common risks often means green homeowners will qualify for preferred homeowners insurance policies, which have lower rates. The lower risks for green homeowners can even benefit other policyholders.
In 2011, providers used 92% of the $62 billion they collected in premiums to pay claims. If there are fewer and smaller claims because sustainable homes are safer and sturdier, insurers might not have to collect as much in premiums. Ultimately, that could mean lower rates for all homeowners.
This article was contributed by Arthur Murray, who writes for HomeInsurance.com. Arthur has more than 30 years of experience writing for newspapers and magazines. He graduated from the University of North Carolina in 1979 with a bachelor’s degree in Journalism.
About the author
Mark English, AIA, Founder and Principal of Mark English Architects, has been working in San Francisco and the Greater Bay Area since 1992. His designs reflect of resourcefulness and efficiency to create high-quality residential design.