News: 2009 Press Release

Observing Earth Day, Insurance Commissioner Poizner today offered tips to consumers for making homes - and insurance - greener in the Golden State.   

"California has consistently been a global leader in the effort to reduce our strain on the environment," said Commissioner Poizner. "This Earth Day, I encourage Californians to examine the many ways they can be green - including through their insurance products."

HOMEOWNERS INSURANCE

If you are considering environmentally friendly updates to your property, remember it's also important to understand how those modifications are covered under your homeowners insurance policy.

Standard Homeowners Insurance

• A standard or non-green homeowners policy generally provides coverage for either the actual cash value or replacement value of your property with standard building materials.
• Actual cash value pays for damages equal to the replacement value of the damaged property minus depreciation.
• A replacement value policy generally provides repair or replacement at the same level of quality as the current value, with no deduction for depreciation, subject to the policy limits.
• If your home was built to meet certain environmental standards, you should confirm that your policy specifically provides replacement to that same environmental level so that you won't have to pay extra out-of-pocket costs to reach those same standards.
• You may also be able to purchase a homeowners insurance policy that allows you to increase your home's green factor following a loss.
• A few companies now offer homeowners policies that allow you to purchase additional insurance before damage occurs to ensure that extra funds are available to make those green enhancements, such as improving the energy efficiency of your home and using sustainable resources.

Green Homeowners Insurance

• Some of the first green homeowners policies could only be purchased for new homes that were certified as meeting climate and zone specific construction standards for energy. Green homeowners policies written more recently cover varying degrees of green repairs.
• A green homeowners policy is one that covers rebuilding a damaged home to green standards. Some policies will allow you to repair your home using green materials, but will have a cap on covered costs. Others may exclude coverage of items such as the fees charged by inspectors for having your home certified or re-certified as green.  
• These policies generally cover the costs of environmentally friendly materials and low environmental-impact processes, as well as energy-efficient replacement products and materials. Green building materials might include lighting, heating and cooling systems, windows, insulation, appliances, home electronics, home office equipment, plumbing fixtures, as well as framing, roofing and siding materials that require less energy to operate, are more durable, sustainability produced, or composed of recycled content.
• Green renovations may help lower your costs on utility bills and even your taxes. Furthermore, they may even lower the premiums on your homeowners insurance. If your entire home, or your home repair, is certified to meet certain construction standards of fire-resistance, safety or longevity, check with your insurance agent or company to see if you're eligible for extra discounts.
• Each policy is different, so make sure your policy covers the items that you want to have covered.
• Last summer, Commissioner Poizner approved the first green homeowners insurance policy in California, offered by Fireman's Fund Insurance Company. Commissioner Poizner urges all companies to explore environmentally-friendly options for consumers. For more information about what types of green insurance options are offered for your home, you should check with your insurance company or shop around.   

In August, Commissioner Poizner began the process to make a new, green auto insurance option available for California consumers. Pay-as-you-drive auto insurance is a way for motorists to more accurately pay for the coverage they need, by linking their premium more closely with the number of miles they drive. This incentive to get people to drive fewer miles will help reduce greenhouse gases and vehicle accidents.  The regulations are expected to take effect in Fall 2009.