Licensed Realtor with 10+ years in personal finance content
Contributor to Nasdaq and USA Today
Daria is a licensed Realtor and resort property manager specializing in personal finance, real estate, and insurance topics. In her spare time, she practices photography.
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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Eco-friendly homes have many positive effects on homeowners and the environment. Green homes often incorporate building materials and techniques that reduce the risk of certain types of damage to your home. As a result, you can earn a discount on your homeowners insurance. You can also save money on utilities thanks to the home’s energy efficiency.
Potential savings aren’t the only reason people choose eco-friendly homes. A sustainable home and lifestyle can be healthier for you, your family, and the planet. Even if you don’t live in an eco-friendly home, you can make it more sustainable with simple changes.
Learn more about the benefits of eco-friendly homes and how you can reduce your home’s environmental impact.
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What is an eco-friendly home?
An eco-friendly home has a small carbon footprint, meaning it produces minimal greenhouse gasses and uses natural resources efficiently.[1]
Eco-friendly homes typically use sustainable materials and technologies to decrease the home’s energy and water usage.[2] For example, passive-design homes use special design and building techniques to improve the efficiency of the home’s heat system and air conditioner.
Other types of eco-friendly homes that promote green living include:[3]
Prefabricated homes comprised of parts constructed and partially put together in a factory
Tiny homes with efficient layouts and less than a few hundred square feet
Earth-sheltered homes built below ground
Straw-bale homes with a framework of straw
Log homes
Shipping container homes
Good to Know
Energy-efficient homes can be more comfortable and durable, according to the U.S. Department of Energy. Eco-friendly homes conserve energy, which can save you money on utility costs.
Key elements of an eco-friendly home
Eco-friendly homes usually have certain sustainable elements in common, including the following:
Energy efficiency
Builders can orient homes toward (or away from) the sun and employ interior and exterior shading to enhance energy efficiency. Other measures include solar power, Energy Star-rated energy-efficient appliances, smart thermostats, performance windows, and ample insulation.
Water conservation
Eco-friendly homes may have low-flow toilets and shower heads, which reduce water usage.[4]
Sustainable building materials
Eco-friendly home construction favors durable and recyclable materials. Straw, timber, bamboo, cellulose, cork, recycled glass, recycled steel, and hempcrete are all examples of sustainable materials. Vegetated roofing — literally “green roofing” — is also sustainable and offers the added bonus of reducing carbon emissions.
Indoor air quality
Green homes reduce indoor air pollution from appliances fueled by gas and oil, mold, carpeting and furniture, radon, chemicals, and other sources. Green homes ensure adequate ventilation and temperature and humidity regulation.[5]
Waste reduction
Construction techniques like “optimum-value engineering” use less lumber, generate less waste, and result in a more energy-efficient home. Modular home construction also reduces waste due to the efficiencies of factory construction.
Green certifications
Newly constructed eco-friendly homes might have a Leadership in Energy and Environmental Design (LEED) for Homes certification attesting to their environmentally sound construction. Energy Star, from the U.S. Environmental Protection Agency, is another popular green-home certification.
Can an eco-friendly home affect your home insurance?
Eco-friendly features can potentially save you money on your homeowners insurance premiums. For example, Farmers Insurance offers discounts to homeowners whose homes have Energy Star, LEED, or EPA green certifications. Travelers offers a home insurance discount of 5% for LEED-certified homes.
A home’s eco-friendly characteristics protect it against several different perils. For example, temperature and humidity control and good ventilation reduce the risk of mold growth. Solar power reduces the risk that pipes will freeze and burst during a winter power outage. Smart sensors can detect water leaks and automatically turn water off if it senses one.
What is green homeowners insurance?
Some insurance companies offer green homeowners insurance as an optional coverage. Green insurance lets you replace products in your home with more eco-friendly or energy-efficient versions in the event a covered peril damages or destroys your current items. It can also cover the cost of rebuilding to green standards after covered damage.
The coverage might even cover the cost of purchasing electricity if a covered peril damages your solar, geothermal, or wind-power system. It can sometimes reimburse you for losses if you sell surplus energy to a power company.
Green insurance is relatively new and still uncommon, so not all insurance companies offer it, and it’s not available in every state. Insurers may cap coverage and exclude certain fees.
Availability varies by state and by insurance company, so insurers don’t have one set of eligibility criteria. But the typical qualifications may apply:
Existence of energy-saving features, such as LED lights and smart thermostats
Sustainable building materials
Water-saving features, including rainwater harvesting systems
Sustainable landscaping
Green certifications or ratings
Contact your insurance agent to see if your insurer offers this insurance and, if it does, whether you qualify.
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Tips for making your home more sustainable
A sustainable house helps preserve the planet for future generations. It’s one of the best ways to enhance your comfort and well-being, and green features can also save you money.
Replace worn-out appliances. Energy Star-rated appliances use less energy, so they cost less to operate.
Install smart-home technologies. Smart thermostats and water sensors control temperature and humidity and warn of leaks.
Weatherize doors and windows. Weatherstripping prevents heated or air-conditioned air from leaking outside.
Shade windows. For east- and south-facing windows in particular, shade windows with curtains and blinds to keep out the sun.
Add extra insulation. Your attic, walls, and ceilings should all have ample insulation.
Enhance your home’s ventilation. Install exhaust fans or a whole-house system for natural ventilation.
Install solar panels. By generating at least some of your own electricity, you’ll see energy savings and might even be able to sell excess electricity to your power company.
Replace old windows and skylights. More efficient windows reduce energy loss.
Replace lightbulbs. Replace blown tungsten bulbs with LED or compact fluorescent light bulbs.
Eco-friendly home FAQs
The following information can help answer your remaining questions about eco-friendly homes.
What is an eco-friendly home?
An eco-friendly, or green, home has a small carbon footprint. It’s energy-efficient, conserves natural resources, and uses sustainable construction techniques and materials to reduce waste and environmental impacts. Sustainable living promotes environmental benefits.
How can you make your home eco-friendly?
Small changes, such as installing eco-friendly products like smart thermostats, weatherstripping, and shading to reduce cooling and heat loss, make your home more eco-friendly. Installing Energy Star-rated appliances and LED or CFL bulbs is also more eco-friendly. You can also use sustainable landscaping to make good use of rainwater and reduce carbon emissions.
If you renovate or remodel, consider using sustainable building materials like recycled glass, cork, and hempcrete.
What is the most environmentally friendly house to build?
Prefabricated homes are practical and environmentally friendly because builders construct them in factories, with less waste than onsite construction generates.
Site-built homes that use sustainable design, or passive design, are also eco-friendly. Passive design uses strategies that include orienting a home to take advantage of sun and wind for warming and cooling, and incorporating passive solar, geothermal energy, or other clean energy as well as natural ventilation.
Are eco-friendly homes more expensive?
Many factors influence building costs, and how you incorporate them determines whether a particular eco-friendly home costs more. For example, solar panels add to the cost but eventually pay for themselves and can even generate income. Sustainable materials might cost more, but efficient construction techniques use fewer materials and reduce waste, which saves money.
Daria Uhlig is a freelance writer and editor with over a decade of experience creating personal finance content. Her work appears on USA Today, Nasdaq, MSN, Yahoo Finance, Fox Business, GOBankingRates and AOL. As a licensed Realtor and resort property manager, she specializes in real estate topics, including landlord, homeowners and renters insurance. In her spare time, Daria can be found photographing people and places on Maryland's Eastern Shore. Connect with her on LinkedIn.
Daria has been a contributor at Insurify since October 2022.
Edited byKatie PowersAuto and Life Insurance Editor
Katie PowersAuto and Life Insurance Editor
Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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