In observance of Earth Day yesterday, California Insurance Commissioner Poizner today offered tips 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.”
With regard to homeowners insurance, he recommended propoerty owners talk to their insurance agents when considering environmentally friendly updates to property. He also suggested agents go over what homeowners policies provide coverage for:
-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.
Homes that were built to meet certain environmental standardsshould confirm that their policies specifically provides replacement to that same environmental level so that owners don’t have to pay extra out-of-pocket costs to reach those same standards, the Commissioner recommended.
Homeowners also can purchase insurance policies that allow them to increase a home’s green factor following a loss, such as providing extra funds to improve energy efficiency or use sustainable resources.
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, he said. Green homeowners policies written more recently cover varying degrees of green repairs.Some policies will allow repairs 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 a home certified or re-certified as green. Last summer, Commissioner Poizner approved the first green homeowners insurance policy in California, offered by Fireman’s Fund Insurance Co.
For more information, visit the department of insurance at www.insurance.ca.gov.
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