As a builder, developer or investor, you already know the importance of having the proper insurance coverage on a project. You may even already know the ins and outs of how to insure green construction projects while they are being built, but do you know how this impacts your customer’s insurance? Every homeowner will have insurance to protect their dwelling and belongings, and green construction can actually lower their cost. Learn how green building impacts homeowner’s insurance so you can explain the benefits to prospective buyers.

According to HWB Communications, “An AMLI Residential survey in the USA showed that more than 80% of people believe living in a sustainable or eco-friendly home is very important. 85% said their sustainable abode is beneficial to physical well-being, while more than 60% are willing to fork out more to stay in a green estate.” So if you’re not already using green building practices, this suggests that you should.

The Insurance Information Institute (III) states that the insurance industry was among the first to adopt public statements on the environment and global warming. Because insurers are continually analyzing risk, it’s no surprise that they are well in-tune with the impact this will have on their businesses. Many insurance companies have also joined business coalitions in calling on the federal government to enact legislation around reducing greenhouse gases. Buildings account for one third of all greenhouse gas emissions, according to Cres, a research company focused on climate change.

Many homeowners are already educated on environmental sustainability and capable of generating their own geothermal, solar or wind power. Some even sell any surplus they have back to the local power grid. Some insurers are supporting this by offering policies that cover income lost due to power outages and assisting with the extra expense of purchasing power from another source. Policies can cover the cost of getting back online, too.

Several insurers offer policies that allow homeowners to rebuild using green materials after a disaster, even if their home initially wasn’t a green building, and even if their original policy did not include this. Using alternative materials lowers the cost the insurer has to pay to repair the damages, as well as make the home more sustainable going forward.

Green commercial and residential building is expected to rise over the next few years, and many insurers are adapting by offering green insurance policies. This will allow business owners and homeowners to make repairs using green materials

Because the insurance industry is so focused on reducing greenhouse gas emissions, many times, green building policies are less expensive or offer discounts to those who have them. According to Policy Genius and, Travelers Insurance offers the best overall insurance coverage when it comes to green construction.

Policy Genius says, “With Travelers green home coverage endorsement, you get additional protection that will repair, replace, or rebuild your home with designated green materials after a covered loss. Additionally, Travelers offers a green home discount which lets you save up to 5% if your home is certified by LEED (Leadership in Energy and Environmental Design), a program within the U.S. Green Buildings Council and one of the leading green home rating systems in the world.”

EarthTechling goes on to say that Farmers Insurance offers the best green discounts, AllState has the most flexible policies, The Hartford is best for seniors and American Family Insurance has the best corporate green sustainability practices.

Your customers are already thinking green, they want sustainable homes that are energy efficient and reduce their carbon footprint on our planet. The construction industry is quickly moving to green building in general, and insurance policies are already there. When you next speak with a prospective buyer, make sure they understand what green construction is, why it’s beneficial and how green building impacts homeowner’s insurance. Homebuyers may be all about “going green” but that does not mean they know how to talk to their insurance company about it, or even that they should. Educating them on the impact green building has on their insurance will garner trust, ensuring a more smooth business relationship.