Friday, 27 November 2009

Green insurance - how ethical is your insurance company?

When insurance companies claim to be carbon neutral, they usually mean balancing a measured amount of carbon emissions with an equivalent amount that is captured through some mechanism or other. With net emissions being zero it becomes ‘carbon neutral’.

The most environmentally aware insurance companies will always seek to firstly reduce their own emissions and those of their customers. This will include making their buildings more eco-friendly, cutting energy use and encouraging customers to drive more fuel efficient cars - giving advice and incentives to reduce their carbon footprint. Only after this will unavoidable emissions be offset.

Carbon emissions can be offset in a number of ways. For example, carbon dioxide released into the atmosphere from burning fossil fuels can be balanced against renewable energy that creates a similar amount of useful energy, so that the carbon emissions are compensated. More dubiously, insurance companies can pay others to remove carbon emissions by planting trees or by funding 'carbon projects' that lead to the prevention of future greenhouse gas emissions, or by buying carbon credits to remove them through carbon trading.

Always be wary of companies who claim to be carbon neutral by simply paying for their emissions to be offset!

Avoid ‘green-wash’

Avoid insurance companies who cynically allude to being environmentally friendly by introducing token gesture benefits. For example, always inquire about what they are doing to cut their own emissions, how they are contributing to combating climate change, and find out if they give discounts for low emission vehicles and eco-friendly initiatives. More tellingly, ask them what car their CEO drives!

FSA Fines
The FSA has the power to fine insurance companies who treat customers unfairly. Here are some examples - has your insurance company mistreated its customers?

Egg fined £721,000 and will compensate PPI customers
"Egg used inappropriate sales techniques to try to persuade customers to buy payment protection insurance on their credit card even when they asserted they did not want the cover." 10th December 2008

FSA fines Hastings £735,000 for not treating customers fairly

The Financial Services Authority (FSA) has fined Hastings Insurance Services Ltd (Hastings) £735,000 for failing to treat its customers fairly in relation to cancelling around 4,550 incorrectly priced car insurance policies. "It is clear from our investigation that Hastings put its own interests ahead of those of its customers." 28th July 2008

Liverpool Victoria Banking Services to pay £840,000 fine plus compensation to PPI customers following FSA investigation The Financial Services Authority (FSA) has fined Liverpool Victoria Banking Services Limited (LVBS) £840,000 for serious failings in the sale of single premium Payment Protection Insurance (PPI). 30th July 2008

The Green Insurance Directory

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