The lowdown on green insurance products

Some lovely trees, yesterday
"Providers who can’t demonstrate some kind of environmental contribution may find themselves losing popularity." Bryan Garvie, The Green Insurance Company
  • | by Rachel England

Green is no longer the new black. Once merely a pursuit of the overly eco-conscious, the term ‘green living’ has now infiltrated every facet of our everyday lifestyles. We’ve got green electronics, green cars, green homes...and now green insurance products to cover them all.

While traditional insurance policies are designed to put your mind at ease should the worst happen, an increasing number of providers are offering green policies that do just that, plus help to allay the worries of those concerned for ol’ Mother Earth.

The Green Insurance Company, for example – now part of Gocompare’s price comparison service – is dedicated to creating woodland areas to help compensate for unavoidable carbon emissions. Working with an organisation called Forest Carbon, they ensure enough trees are planted to offset one tonne of emissions for each of their car and home insurance customers, which to date means around 2.5 million new trees in the UK, and the creation of 20 new woodland areas.

The company also funds green initiatives in local communities, with a green grants programme that has distributed more than £60,000 to local environmental groups over the last two years.

Or consider Marks & Spencers’ efforts. Its environmental ‘Plan A’ stance means that its home insurance product offers energy efficient benefits as standard: if you claim for an electrical item, they’ll replace it with a new ‘A’ rated energy efficient model. Should your house need repairs or rebuilding, they’ll make sure the work is carried out under the Code for Sustainable Homes.

Then there’s the motoring industry, one of the biggest offenders for carbon emissions. Here, insurers are increasingly offering discounts to drivers of eco-friendly cars, and touting ‘pay as you drive’ schemes, which reward motorists for cutting their mileage.

Green thinking has even spread into niche insurance markets. The Green Insurance Company’s pet insurance product saw a 166% rise in sales last year, popular with animal lovers because the company donates £5 from every policy sold to one of three environmental charities. Customers can choose to have their donation sent to the Marine Conservations Society, RSPB or the Budongo Conservation Field Station (a Royal Zoological Society project).

And the good news is, thinking green no longer comes at a premium. Where once such ‘environmental add-ons’ meant a bumped-up quote, providers are keen to remain competitively priced (after all, while they’re environmentally conscious they’re still profit-generating organisations). Bryan Garvie, spokesperson for The Green Insurance Company, says: “We factor the costs associated with offsetting our customers’ carbon emissions into the overall running costs of the business – this allows us to minimise the impact on premiums so that no direct cost is passed onto our customers. We don’t think environmentally sound products should come with a price premium.”

Without an issue of price, then, the green market is more open than ever before, and so, as Garvie notes, an increasing spread of the population is jumping on board. “We’ve looked into who buys green insurance and it’s an increasingly broad church; clearly the common denominator is a keen interest in green issues, but beyond that it’s everyone from young single professionals through to couples with young families and people who have retired. As far as we’re concerned there are no barriers to using a green insurance policy.”

Indeed, as eco-insurance products become increasingly normalised, it’s likely providers failing to offer a green choice may be left behind, Garvie foretells. “As time goes on I think green issues will be a greater consideration, and providers who can’t demonstrate some kind of environmental contribution may find themselves losing popularity. The environment has gone from being a peripheral issue to one which is very much in the mainstream and of real importance to people – you no longer need to be a ‘tree hugger’ to care about the environment.” (Indeed, to see how your bank or insurer ranks on this agenda, visit Ethical Consumer for a comprehensive look at the environmental and ethical pros and cons for a variety of organisations).

A wealth of other green financial products already on the market supports Garvie’s assertion. The Co-Operative’s popular ‘Think’ credit card, for example, allows users to protect five tennis courts’ worth of Indonesian rainforest with their first spend, and donates a further 25p to RSPB’s Indonesian Rainforest Project for every £100 spent.

Or there’s the Ecology Building Society, which offers a range of mortgages and savings accounts designed to promote and nurture sustainable environmental projects.

Green financial products are gaining traction within the market. They’re no longer deemed quirky or unusual, and with the planet facing increasingly pressing environmental concerns, they may soon become more common than you think. It might even be a question of when – not if –go green.