Choosing Climate-Friendly Insurance

With almost every aspect of our lives undergoing a green makeover, it may come as no surprise that insurance companies are starting to reward their customers’ environmental choices.

An April 2009 report by Ceres–a network of sustainable-business advocates–discovered that insurance companies are starting to respond to climate change. Several companies, especially in Europe, have created policies that encourage consumers to limit their contribution to greenhouse gas emissions.

“Consumers should look for products that recognize the benefits of climate-friendly activities,” Evan Mills, a scientist at Lawrence Berkeley National Laboratory and an expert in greening insurance, told me in an email.

For instance, keep an eye out for discounts on highly energy-efficient homes or car insurance where you pay by the mile–and in the process save on premiums every time you jump on a bus or a bike, Mills said.

Two well-known climate-oriented companies are Fireman’s Fund, which rewards energy-efficient homes, and Progressive, which offers a pay-as-you-drive program for occasional drivers, he said.

Making homes more energy-efficient and sustainable is a popular option. The Ceres report–based on 2008 data–found that 22 insurance companies offer incentives for “green building”–both in constructing new buildings and upgrading old buildings to not be energy hogs. The Leadership in Energy and Environmental Design (LEED), a certification program run by the U.S. Green Building Council, is generally considered the gold standard for green-building practices. (Related: “Finland’s U.S. Embassy Gets Gold Star for Green Makeover.”)

For those public transportation mavens, more than 24 companies also have pay-as-you-drive products. Policyholders who drive less than the average driver could get up to a 60 percent discount with some companies, the report says. Progressive’s MyRate program allows occasional drivers to plug a device into their cars and wirelessly keep track of how much they drive–the information is used to set their insurance rate.

There’s also discounts for owning fuel-efficient or low-emission vehicles. For instance, Fireman’s Fund created the first replacement upgrade for hybrid cars. That means if you total your new car, you’ll get a hybrid as a replacement. For boating enthusiasts, Travelers gives an up-to-10 percent premium discount for hybrid-electric boats and yachts, the report said.

And then there’s insurance that covers the impacts of climate change, such as extreme weather events. Micro-insurance for low-income customers that don’t have access to traditional insurance now covers about seven million people, according to the report. This type of coverage–which was a focus of the Copenhagen climate conference in December–is especially needed in developing countries where food and water shortages are severe.

So if you’re already living a low-impact lifestyle, it may be worth checking to see if your insurance can help.

Christine Dell’Amore

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Christine Dell'Amore, environment writer/editor for National Geographic News, has reported from six continents, including Antarctica. She has also written for Smithsonian magazine and the Washington Post. Christine holds a masters degree in journalism with a specialty in environmental reporting from the University of Colorado at Boulder. Her book, South Pole, was published in 2012.