Insurer rolls out 'green' coverage for homeowners

"The green upgrade will actually replace a home that is not already green in the event of a loss," Erron Al-Amin, the company's senior director of Personal Insurance, said Monday.

Fireman's Fund, which officially unveiled the plan Tuesday, is offering the green coverage option in several states, including Arizona, Georgia, Maine and Nevada. In California it will be folded into the overall plan beginning Aug. 1.

The Novato, Calif.-based company has received clearance to sell the optional coverage in 26 states, Al-Amin said, and expects to get clearance from all U.S. states by the end of the year.

The green coverage, however, is only being offered as an add-on to the company's top-tier homeowners insurance package. It would cost $25 a year to add the coverage for a home with a replacement cost valued at $500,000 or less, Al-Amin said.

The green coverage feature also only kicks in if the damage is already covered under the overall base homeowners insurance policy. Flood damage, for example, isn't covered unless the homeowner pays for that coverage add-on as well.

Norma Garcia, a senior attorney for Consumers Union, the publisher of Consumer Reports, said the green-oriented coverage plan has the potential to encourage homeowners to rebuild their homes in a more environmentally friendly way.

"To the extent that it's an innovative and affordable product that increases options for homeowners, that's a good thing," Garcia said. "It might very well be a great product, or it might be something that is just skating off the whole green phenomena."

Garcia noted that consumers should consider the overall benefit of such coverage compared with their present coverage.

She advised, "You look at the policy, you see what's included, you see what's excluded ... and you decide if what they're offering you is still worth it."