7 Environmental Home Updates That Impact Insurance

Reducing Insurance Claims with Environmental Home Updates

If you've been thinking about making some environmental home updates to your home, you've probably been focused on the benefits of reducing your carbon footprint and increasing your energy savings. But did you know that many environmental home updates can also positively impact your home insurance coverage?

From an upgraded roof to a new water heater, there are many ways you can help the environment, save money on your utility bill, and potentially even lower your homeowner's insurance rates. If you're interested in learning more about the connection between making your home more environmentally friendly and improving your home insurance coverage, give us a call to speak with your knowledgeable broker at Morison Insurance.

How Environmentally Friendly Home Updates Can Impact Insurance Coverage

As we move forward in the 21st century, we must do our part and invest in environmental solutions that reduce carbon emissions. The best place to start is at home. But it's not all altruistic—making your home more environmentally friendly can also make it more comfortable for your household and save you a significant amount of money by lowering the energy costs on your monthly utility bills. As a bonus, it can even positively affect your home insurance coverage and rates. But how does that work? The main reason why specific updates can affect your home insurance is that they lower the risk that you'll have to file an insurance claim. 

Reduced Risk of Property Damage Claims

Not all environmental home updates can lower the risk of damaging your home, but many can. Suppose your house is at a reduced risk of damage from fire, flooding, sewer backups, and more. In that case, you are far less likely to have to file an insurance claim on your homeowner's insurance to get compensation to restore the damaged areas or repair and replace damaged or destroyed items.

The most significant benefit of reduced risk of damage is that you're less likely to be forced to deal with the stress and hassle of a major incident such as a flooded house, but not needing to file an insurance claim is a bonus because you don't have to worry about making a mark on your insurance claims history and potentially having your home insurance premiums increased.

Insurance Discounts and Better Coverage Options

Not having your premiums go up is good. Still, the proper environmental home updates can lead to home insurance discounts from your current rate, and you may even get different and better coverage options in place, depending on what your insurance company offers. For example, update an old electrical or plumbing system that was previously putting your home at risk of an electrical fire or plumbing-related water damage. Your insurance carrier may be willing to provide you with more cost-effective insurance coverages that were yet to be available with the higher-risk system still in place.

Whether you're considering updating your home or already doing so, it's a good idea to call your Morison Insurance broker and let them know. Along with the potential for discounts, it's possible that the update has changed the value of your home, and you may need updated coverage limits to ensure you can get the full compensation to rebuild your home in the event of a catastrophic disaster.

Environmental Home Updates to Your Home That Are Worth Considering

So, which environmental homeupdates to your home are the most likely to positively influence the planet's health and the health of your bank account? Here are some options that are well worth considering for your home.

1. Roof

As Ontarians, we're accustomed to weather that can sometimes be extreme or just relentlessly persistent—and your roof takes the brunt of all that battering from rain, snow and hail. Even though your roof is built to last, it can only hold up so long under that constant abuse. We all know from elementary school that heat rises, which means a deteriorated roof that can't hold in heat properly costs you a lot of energy costs as your heating system has to work harder to compensate for the heat loss. Replacing or even repairing your roof can reduce your energy consumption considerably. Still, it can also lower the risk of significant damage from water leakage, which is good news for your insurance premiums.

Pro Tip: Consider opting for light-coloured shingles or roofing materials that reflect the sun rather than absorbing it to keep your house much cooler in summer and save you even more money by giving your air conditioner a break.

2. Heating

In warmer climates, the air conditioner is the biggest energy consumer in almost every home. Still, here in Canada, it's more likely to be your furnace that uses up the most energy as you use it during at least three seasons of the year. If you have an older furnace that's still chugging along after a decade or so, upgrading to a new, energy-efficient heating system can significantly impact your energy savings and make your home more environmentally friendly. As furnaces suffer wear and tear damage over time and slowly deteriorate, the risk that they could cause a fire increases. Replacement with a brand-new system will lower that risk and could, therefore, impact your home insurance. Suppose you happen to be primarily heating your home with a wood stove. In that case, changing it out in favour of a natural gas or electric system will dramatically reduce the risk of a house fire, almost certainly lowering your insurance costs.

Pro Tip: If you switch to natural gas from another heating system, installing carbon monoxide detectors in your home for added safety is essential. They should be positioned low to the floor on every story of your home, especially near sleeping areas.

3. Smart Home Devices

Smart home devices are next up on the list of environmental home updates worth considering. That category could include a smart thermostat that adjusts temperatures automatically based on the time of day and other cues. That saves you money and reduces your carbon footprint, but it can also help you avoid damage by monitoring the temperature in your home to prevent problems like frozen, burst plumbing pipes. Another option is an intelligent hub that allows you to control lighting and even smart appliances remotely—no more worrying that you left the stove on when you can simply check it on your smartphone and shut it off remotely if you did forget.

There are also smart devices that are essentially sensors that report an alert to your phone if they detect something damaging. For example, if you have a flood-prone basement you can take steps to prevent basement flooding by placing a smart sensor near the floor in the area that's likely to flood, and it will detect the presence of water early on so you can stop it before it causes significant damage. Or, water shutoff valves sense abnormal flow and automatically cut off the water supply to avoid moisture damage.

4. Electrical

Your electrical system is another area of your home that warrants consideration regarding environmental updates. Suppose you have an old house with an electrical system that has never been upgraded from knob and tube wiring. In that case, no doubt having an electrician put in a modern system will significantly impact your insurance rates because the fire risk is so high with knob and tube wiring. In fact, many insurance companies will refuse to insure a home until after removing the knob and tube wiring.

But even if you have a "modern" electrical system that hasn't been updated in a few decades, it's likely due for an overhaul. Calling a professional electrician to take a look and make some recommendations can go a long way toward making your home safer from the possibility of a fire or electrical shock, which lowers the probability that you'll have to make an insurance claim and also means you'll have a more efficient system that can use less electricity to provide the same services. Want to see your energy bills drop even further? Another option to save on electricity or any other energy source is to consider solar energy. Solar power is the perfect clean energy source and the type of green power that protects the environment.

5. Plumbing

Fire is scary because it can cause serious injury, so homeowners often focus their prevention efforts on it—and there's nothing wrong with that. But when it comes to potential damage to your home that would prompt you to file an insurance claim, water is far more likely to be the damaging factor. When people think of water damage, they often imagine it being caused by something like torrential rain or an overland flood caused by a river or lake that has burst its banks, and those situations are certainly concerning. However, the truth is that non-weather-related water damage is the leading cause of interior property damage. If that water isn't coming from weather events, it's safe to say it's coming from plumbing systems.

Your plumbing is a very complex system with thousands of parts, so there's plenty of opportunity for something to go wrong. Damage can be staved off with diligent, routine maintenance, but eventually, it's necessary to update some or all of the system to avoid problems with water damage from leaks.

6. Water Heater

The water heater is something homeowners don't typically think about when they're looking around for environmental home update ideas, but it should be. A conventional, tank-style water heater uses tremendous energy because it's always on and has to draw enough energy to constantly heat that big tank of water to about 60 degrees Celsius. Water heaters lose efficiency as they age and need even more energy to provide the same amount of water, while at the same time, manufacturers are continuously working to innovate new ways of making their products more energy-efficient. That means replacing a hot water tank that is more than a decade old with a new tank-style model can not only lower your energy consumption and operating costs but also lower the chance of a leak that could cause severe water damage.

Pro Tip: If you want to save even more money on energy costs and further reduce the risk of a leak, consider investing in a tankless water heater. As the name suggests, a tankless water heater is a hot water system that eliminates the need for a tank because it only heats water on demand when you turn on the tap. It's a device that is installed on your water line, so there's no storage tank of water involved and that eliminates the risk of a leaking tank that could cause you to need to file an insurance claim.

While energy-efficient appliances are very reliable, maintenance is key to ensure they remain in working condition, and you won't ever have to worry about unexpected occurrences.

7. Windows

Any gap, crack or hole in the exterior shell of your home is an opportunity for air leaks and heat transfer—and what is a window, if not a big hole in your house siding? Heat transfer is the natural process in which thermal energy tries to move from a warmer place to a colder place and, therefore, seriously compromises the efforts of your heating and cooling system, so it has to work harder and use more energy.

Some high-end windows are designed for energy efficiency improvements by reducing the amount of heat transfer they will allow. For example, insulated dual-pane windows feature two (or more) panes of glass with a small gap between them, sealed at the edges. The gap is sometimes filled with argon gas to prevent heat transfer further. If you've got single-pane windows or deteriorated double-pane windows with a broken seal that lets the argon escape, replacing them with new, energy-efficient options will significantly reduce your HVAC system's energy consumption. Since deteriorated windows are prone to letting in moisture, replacing them will also limit the risk of moisture damage. Even a quick fix, like weather stripping, is easy to install and will assist with any drafts or leaks before you can invest in a long-term solution.