Feb 2016 INDEX

Green Insurance

For consumers and business owners committed to "going green", a wide range of insurance options is now available. Below is a breakdown of some of the innovative, eco-friendly products, services and discounts offered by many insurers.

Hybrid discounts. Some auto insurance companies offer premium discounts of up to 10 percent for those who drive hybrid vehicles. A similar discount may also apply to hybrid electric boats and yachts. Some auto policies have the option of adding an endorsement to upgrade to a similar model hybrid vehicle after a total loss.

Alternative fuel discounts. If your car uses an alternative energy source, such as biodiesel, electricity, natural gas, hydrogen or ethanol, you could be eligible for a discount on your premium.

Pay as You Drive (PAYD) programs. Several insurers offer PAYD programs, in which a device or sensor in the car tracks miles driven as well as speed.

Depending on the program, different techniques are used to collect the information; some take odometer readings, others may use GPS systems. The information is then used to reward policyholders who drive fewer miles than the average driver by providing them with discounts.

According to some estimates PAYD subscribers may decrease their miles driven by 10 percent or more, saving consumers money while reducing accidents, congestion and air pollution.

Insurers are helping to promote sustainable building practices by offering green homeowners and commercial property policies, including:

• Premium discounts for those whose homes meet stringent efficiency and sustainability standards, e.g., LEED certified homes.

• LEED is short for the Leadership in Energy and Environmental Design Green Building Rating System developed by the U.S. Green Building Council and is a recognized environmental standard in the building world.

• Homeowners coverage that replaces/rebuilds after a loss with more eco-friendly materials is often offered as an endorsement to a standard homeowners policy.

• Some companies will pay homeowners extra if they replace old kilowatt hungry appliances with Energy Star devices and recycle debris rather than send destroyed materials straight to a landfill.

• The Energy Star label means the appliances meet an energy savings rating created by a joint program of the U.S. Environmental Protection Agency and the Department of Energy.

For homeowners who generate their own geothermal, solar or wind power and sell any surplus energy back to the local power grid, there are now policies that cover both the income lost when there is a power outage caused by a covered peril and the extra expense to the homeowner of temporarily buying electricity from another source.

Policies generally cover the cost of getting back online, such as utility charges for inspection and reconnection.

After a loss, green commercial property insurance policies and endorsements, some of which are directed at specific segments of the business community such as manufacturers, allow building owners to replace standard systems and materials with green ones. These can include energy efficient electrical equipment and interior lighting, water conserving plumbing and nontoxic and low odor paints and carpeting.

In the event of a total loss, the policy will often cover the cost of rebuilding as a green certified building. This coverage may also pay for engineering inspections of heating, ventilation, air conditioning systems, building recertification fees, replacement of vegetative or plant covered roofs and debris recycling.

Some cover the income lost and costs incurred when alternative energy generating equipment is damaged.