Superstorm Sandy left New York, Atlantic City and other municipalities damaged but not dead. One of the interesting facets as these cities rebuild is the push to do it sustainably. Such a move not only will provide long-term benefits to the environment, it will help protect those cities from other strong storms, cutting risks for individual home and building owners. It also makes insurance sense – reducing the risk of filing a claim helps the policyholder and provider.

It's already happening. New York Gov. Andrew Cuomo has unveiled a plan for $1.7 billion in relief and rebuilding funds for New York City and other municipalities in the state that were hit hard by Sandy. That program requires strict standards for green construction and requires energy efficiency for the rebuilt home and businesses. Similar tactics have been discussed for Atlantic City and other parts of New Jersey as well.

The connection between sustainability and safety is important but often overlooked. Here's how it can work for homes and businesses in any city.

It starts at the top  

Roofs are central to green projects. Aluminum and steel, because of their reflective nature, help with energy efficiency. They also are among the most widely recycled materials and can be reused once their time is done on the roof. Steel and aluminum roofs also last about twice as long as wood or asphalt ones.

Those are the green benefits, of course. But the metal roofs also are much sturdier than other choices. It means they'll stand up better to wind and other problems, cutting your risk of filing insurance claims. Here's why this is big: Roof damage occurs in up to 95% of water- and wind-related losses, according to the Insurance Institute for Business & Home Safety. Cutting the risk of this type of damage means you're much less likely to file an insurance claim.

Reducing water damage is no pipe dream

Another goal of green design is reducing water usage. Sustainable buildings do this by using upgraded plumbing systems, including toilets, that don't require as much water. Such systems also aren't as likely to leak or result in burst pipes.

From an insurance standpoint, these systems address a major concern. Water damage accounts for nearly 25% of homeowners claims each year in the U.S. Losses from toilet failures – which make up about 90% of water claims – can total as much as $10,000 per claim. Lowering the chance of damage makes sense.

Be cool – but not too cool

Updated heating and air conditioning systems undoubtedly are more energy efficient – that's why they're part of green certification. But modern systems also reduce the likelihood that insurers will have to pay claims for fire or water damage.

Faulty HVAC systems are a leading cause of house fires because they have to work too hard to cool a home. In addition, if the system doesn't work well in winter, the end result can be frozen – and then burst – pipes.

New wires, fewer fires
Yes, faulty HVAC systems can result in fires. So can faulty wiring and electrical systems. Modern, green electrical systems eschew outdated fuse boxes and ungrounded electrical outlets, making them more efficient, especially when paired with Energy Star appliances approved by the U.S. Department of Energy and the U.S. Environmental Protection Agency.

Insurers, meanwhile, consider electrical systems that are less than 10 years old to be considerably safer and therefore less of a risk to cover. The average loss from a residential fire is about $30,000 per incident, according to the Insurance Information Institute.

Will the drive for sustainable rebuilding work?

It already is working on a small scale. Greensburg, KS, wrote the book on making a sustainable recovery from a disaster. 

A tornado devastated the town in May 2007, destroying nearly 95% of it. Greensburg leaders decided not just to rebuild the city but to rebuild it sustainably, in a way that would save materials and energy, promote conservation and improve safety. With the help of $80 million from the Federal Emergency Management Act and $2.5 million from the national Renewable Energy Laboratory, the town built homes that are 40% more energy efficient than the ones they replaced.

Six years after the disaster, Greensburg now boasts the highest per capita ratio of Leadership in Energy and Environmental Design-certified buildings in the world.

The implications of reducing risk

The primary objective of sustainable building is to save resources, whether building materials or energy sources. But lowering risks by such construction also can result in lower insurance premiums because claims are less likely. (See the RateReport for a full list of average home insurance costs by state in the U.S.)

That's great for the green home or business owner, but there are wider implications as well. Reducing the number of claims ultimately could reduce the amount of money insurance providers have to take in to pay them off. When that happens, rates could decrease for all policyholders – not just for those who follow sustainable practices.