Home Insurance Incorporates ESG to Promote Green Living and Sustainable Development

With the recent, sudden drop in temperature, and the cold, dry weather, many people are using home appliances such as heaters and humidifiers. Furthermore, as we celebrate the festive seasons, we often like to light scented candles at home to create a joyous atmosphere. But we should always remember to exercise safety at all times when using these appliances. Recently, there have been some incidents of home fires caused by the use of certain appliances for prolonged periods, candles left burning unsupervised, or food being cooked unattended. If we want to reduce the losses caused by home accidents, home insurance can provide comprehensive protection.

Accidents happen, and home fires undoubtedly cause damage to households and destroy personal belongings. Home insurance provides comprehensive protection by covering damage to the contents of your home caused by accidents, including furniture, appliances, valuable items and collectibles. If your residence requires repairs that render it temporarily uninhabitable, home insurance provides coverage for temporary accommodation. In the unfortunate event that a fire spreads to neighbouring homes, causing accidental damage or loss of personal belongings, home insurance also provides personal liability protection, covering legal expenses and costs incurred by the insured.

In recent years, there has been a growing shift among the business community towards adopting greater environmental, social, and governance (ESG) elements in how companies operate. Many insurance companies are now incorporating ESG and sustainable development principles into their business models and insurance products. This trend reflects the insurance industry’s commitment to sustainable development and environmental protection, and provides an upgrade in coverage and services to address societal demands regarding these issues.

The introduction of environmental protection coverage in home insurance is a concrete example of this in action. Some insurance companies have started offering green compensation coverage to their customers. When each eligible insured household appliance, including air conditioners, refrigerators, washing machines, dehumidifiers and televisions, is completely lost, damaged or when repairs are no longer cost-effective, the insurance company provides additional compensation to the policyholder if they replace the same appliance with at least a grade-2 energy efficiency label product. This is a gesture of gratitude to customers for adopting a more environmentally friendly lifestyle. Initiatives such as this aim to reduce carbon emissions and promote energy conservation, allowing insurance companies and customers to contribute to sustainable development together.

Therefore, when choosing home insurance, it is in your interest to understand the ESG policies and products of different insurance companies and make your choices based on personal needs and environmental awareness. Such choices can provide personal protection while also creating a better future for the planet and the generations yet to come.

As the lunar year draws to a close, we would like to wish you all a prosperous and healthy Year of the Dragon, and success in all your endeavours.

This Chinese version of this article was published in the Hong Kong Economics Journal 

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