Home Insurance: Solar Panels & Other Environmental Add-Ons

For More Articles on Home Insurance, Visit Our Home Insurance Resource Center.

Eco-friendly home improvement projects are becoming ever more popular among homeowners eager to reduce their home’s carbon impact and save more on recurring energy or repair costs. According to the National Association of Home Builders, current trends indicate that up to 38 percent of homes will be green by 2016. New homes are not the only ones going green either, the same report indicates that 22 percent of home remodeling contractors anticipate they will be focused on green projects this year. Less than two years ago, only 8 percent of remodelers worked on green projects.

The green revolution is being driven by a variety of causes not the least of which is concern for the environment. Green is not only better for the planet; it is rapidly proving to be great for the homeowner’s financial bottom line as well. Homeowners across the country are taking advantage of eco-friendly updates to lower their annual taxes, utility bills, and insurance premiums.

Homeowners across the country are taking advantage of eco-friendly updates to lower their annual taxes, utility bills, and insurance premiums.

How Homeowners Harness The Sun

When most people think of green home power generation they tend to think that solar panel-lined rooftops are really only cost effective for home’s in sunny southern states, but that’s not the whole story. Solar panels do not need to be in direct sunlight to harness and store UV rays. And while their net power gain will be lower, homeowners in the midwest and north are increasingly using the solar-panels to diversify their utility sources and cut costs.

Germany is known for beer, pretzels and luxury cars and less well known for it’s sunshine. Even so, the nation’s total solar capacity of 9,785 megawatts is one of the highest in the world and enough to meet 5% of Germany’s electricity demand. The majority of this solar power comes from cheap (and German weather-proof) roof top panels installed by private homeowners.

Solar panels do not need to be in direct sunlight to harness and store UV rays

The average home needs about 600 square feet of solar panels to provide for the power needs of the home. Residential solar panel installations are generally done on rooftops but can also be tucked away in the corner of a large backyard an area of 20’ x 30’. (Be sure to research your backyard installation options as they are not feasible for every property.)

Homeowners insurance carriers vary in how they treat solar panels in terms of premium costs. Depending on your policy and the specifications of your solar installation, a provider can raise, lower or maintain your premium to fit. Be sure to discuss your provider’s policies with a licensed agent before you start a new project. Your insurance company will need more detailed information than the fact that you want to add solar panels. The information they may ask for includes:

  • Type and number of panels to be installed
  • Where your building the project (backyard or rooftop)
  • The name of the installation contractor

Insurers may lower or leave rates unchanged for ground based installations because they do not present any added risk to the home itself and are treated as a separate out building like a shed or detached garage. Some insurers have been known to lower rates by 2-5% regardless of the type of installation based on the assumption that green homeowners are less likely to file unwarranted claims and are more responsible in general.

Eco-Friendly Heating and Cooling Options

The cost of home energy consumption includes more than keeping the lights on, it includes heating and cooling which can be the most costly home expense after the mortgage. Geothermal heating and cooling systems can reduce those costs by 80% or more. Insurers like Pennsylvania’s Donegal Group offer up to a 5% discount for homeowners that use Energy Star Compliant geothermal heat pumps.

Solar and Geothermal are two things; they are wonderful environmentally sound money saving solutions and they are very expensive to implement. If your green budget is a bit more modest, there are other retro-fits that can produce substantial savings for a much more reasonable cost.

When asked which uses more fuel; raising the temperature of your home from 60 to 70 degrees when you get home from work or wake up in the morning or keeping the house at 70 degrees all time many people quickly answer, keeping the house at a constant temperature is less expensive, and they would be wrong. Programmable thermostats are priced to pay for themselves in a matter of months or weeks in colder regions. They range in price from $20 to $80.

According to Energy.gov, you can knock 1% off your heating bill for each degree you lower your thermostat by for an eight hour period. That means if you lower your thermostat 10 degrees for the eight hours you are at work you will save 10% of your heating cost. If you do the same thing while you sleep you can lower your heating cost by 20% a day!

Consult Energy Star Efficiency Ratings

We’ve all seen the blue Energy Star logo on appliances from refrigerators to washing machines but we don’t always take the time to appreciate what that means. The Energy Star program is part of Environmental Protection Agency and was established to help consumers and businesses save money by being able to more readily identify and energy efficient products.

When making home appliance decisions the information provided by Energy Star labeling can save hundreds of dollars a year in utility costs. Be sure to shop around their site, Energy Star also breaks down what it costs to operate different models of the same appliance.

Investigate Rain Capture and Xeriscaping Options

Unless your home runs on well water you’re likely paying for water and that includes every drop that you pour into the ground to water flowers, vegetables, trees and shrubs. Hundreds of gallons can pour out of a garden hose in an hour. Watering outdoor plants alone 3 times a week can add up to a pretty penny in no time. Investing in a less water hungry landscape could save you hundreds of dollars this summer. Simply ask a plant specialist at your local garden store about species that are native to your area and thrive with less intensive watering.

Some green headed gardeners are also employing rainwater capture techniques to save on municipal water bills. The concept is simple: when it rains collect the water for use during droughts. By connecting your home’s downspouts to collection barrels your entire roof can be used as a giant funnel collecting and directing even small amounts of rain to rainfall capture tanks. After you’ve researched these projects online, you’ll get a better idea of what type of system would work on your property. If you build a large enough catching system, even a passing thunderstorm could provide a week’s worth of water.

For Your Information

Homeowners insurance doesn’t cover everything. Even with riders, homeowners still need to buy separate policies for certain risks like flooding. Another less known protection is Environmental Contamination Insurance which protects you from the cost of cleaning up pollutants that are on you property or emanate from your property and cause contamination. This coverage can be quite costly and may only be necessary under very specific circumstances.

Going green, protecting the environment and saving money are all very closely related. Just be sure to thoroughly research your options before jumping into anything with both feet. When it comes to your homeowners insurance not every green retrofit is going to lower your rates, most won’t have any effect, and some may even raise your rates significantly.

Going green, protecting the environment and saving money are all very closely related. Just be sure to thoroughly research your options before jumping into anything with both feet

Your homeowners premium isn’t the only, or even the largest, factor to consider when you’re planning your eco-friendly home improvement projects. And neither is the level of it’s environmental altruism. With so many projects to choose from, the trick is to find a balance that works for the environment and your personal bottom line.

Loading Disqus Comments ...
Loading Facebook Comments ...

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>