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Guide to Homeowners Insurance and Solar Panels

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A document entitled "Homeowners Insurance" has notes stacked on top, including one with the words "Is Solar Covered?" as a homeowner researches the relationship between homeowners insurance and solar panels.
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Going solar is a significant investment, which means you’ll want to make sure that investment is protected by insurance against damage and other unexpected events. Typically solar power installations come with a solar warranty that covers against product defects and guarantees a level of performance, but it could help to have additional protection for your home.

It may also be helpful to investigate if your current homeowners insurance policy even covers your solar energy system, or if you need to buy additional protection for your solar investment. This guide will walk you through the relationship between homeowners insurance and solar panels, and help you understand what home insurance for solar usually does and doesn't cover.

Does Homeowners Insurance Cover Solar Panels?

Typically, most major insurance policies for homeowners will cover solar panels, because the solar power system is considered to be a permanent attachment to your home. In many cases, you will not need an additional add-on or “rider” that would impact your plan or premiums.

However, it is not necessarily as simple as installing your solar panel system and receiving immediate coverage by your insurance. Insurance policies for solar energy systems come with detailed nuances, so you should discuss several important topics with your insurance provider to make sure you’re completely covered:

Do you cover any accidents during the installation process?

  • Some insurance companies will cover the panels once they are installed, but not any of the panels are broken during installation.
  • You should also check if your insurance covers any roof damages caused by the solar power installation.

Do I need additional insurance to cover the solar panels?

  • Depending on the type of solar panel system being installed, you may need supplemental insurance.
  • The location of your solar panels plays a huge factor in how they are insured, as most dwelling coverage just includes your main house.

Do I need to raise my coverage limit to account for natural disasters?

  • Your coverage limit is the max amount of money your insurance company will pay in the event of a claim.
  • Thus, you want to ensure you have enough coverage to account for all the costs of rebuilding your home and installing an all-new solar energy system if the worst were to happen.
  • That could mean purchasing more coverage.

What happens if I’m leasing the solar panels?

  • Generally, if you lease your solar panels, the company you lease from should handle any repairs, not your insurance company.
  • However, you need to know how your homeowners insurance interacts with the insurance provided by the solar panel leasing company.

Are maintenance and service covered under my homeowners insurance?

  • Generally, maintenance and service are not covered under a manufacturer’s solar warranty or your homeowners insurance.
  • Homeowners interested in additional maintenance and service can enroll in a program like Palmetto Protect, which offers quick access to energy monitoring, dedicated customer support, exclusive discounts, and best-in-class maintenance services.

Weather and Natural Disaster Coverage

Solar panels are designed to be able to withstand wind and rain, but they can still occasionally be damaged by a major storm or extreme weather event. Where you live is definitely a consideration when selecting the level of homeowners insurance you need, and what is a covered peril.

For instance, if you live in Arizona, you probably aren't worried about hail damaging your solar panels. However, if you live in the Midwest, you will want to ensure your insurance policy covers wind damage because of the increased chance of tornados. Additionally, if you live in an area with a higher risk of natural disasters such as earthquakes, you should talk to your insurance provider about the coverage you need for your solar panels.

If you have your solar panel system producing electricity on a detached garage, shed, or barn, those sorts of buildings are often not considered part of your home. Typically, an insurance company will only cover a small percentage of additional buildings on your property, so, if you installed solar panels on other parts of your property and they’re damaged by weather or a natural disaster, they may not be fully covered.

Supplemental Policy

Your homeowners insurance policy is designed to cover you if something terrible happens, such as a tornado or fire. If something like that does happen, you should receive enough money to rebuild your house. However, while your homeowners insurance may "cover" your solar panels against damage, you may not receive enough money to rebuild your home and then install a completely new solar panel system.

This is where a supplemental policy comes into play.

These supplemental policies provide additional protection to any belongings that fall outside the coverage of your basic homeowners insurance. For instance, if you own a shed, you may have a supplemental policy covering what is contained within the shed. So, in the event of an emergency situation, everything you had in the shed would be covered by insurance.

A supplemental policy for solar panels could cover some or all of the following:

  • Installation
  • Separate buildings with solar panels on them
  • Increased infrastructure related to your solar power system (including ground-mount arrays)
  • Any solar battery storage system

One alternative to getting a supplemental policy for your rooftop solar panels is to get a more comprehensive plan. This could be easier because everything would be covered under a single policy, rather than spread out over several. A conversation with your insurance provider can help you build such a plan but remember: If it covers more, it will usually cost more.

What If I Want Better Homeowners Insurance for My Solar Panels?

If you don’t like the answers your insurance company gives you, you may wish to start looking for better coverage from a company that does insure solar power. Here are some examples of leading providers that offer quality solar panel coverage:

  • Nationwide - As a standard policy, Nationwide advises that you both increase your current coverage limit, and confirm whether or not you need a separate policy for your panels.
  • Allstate - Before investing in solar panels, Allstate recommends checking city laws and homeowners association policies (if applicable) for any regulations about solar power. In some places, an HOA can restrict solar panel installations.
  • Kin - Kin reminds you to examine your current insurance coverage to see what type of damage is and isn't covered. For example, you may be covered from hurricanes and wildfires, but not acts of war or earth movements.
  • American Family Insurance - Some insurance policies only cover the solar panels that specifically power your home. American Family Insurance (AFI) reminds people that, if you install more panels than your home needs for 100% of its energy consumption, those excess panels might not be covered.

Will Solar Panel Insurance Increase My Homeowners Insurance Premiums?

Insurance plans can vary wildly, so there isn't a definitive answer to this question without talking to your insurance provider. However, in most cases, adding solar panels will increase your homeowners insurance premiums, especially if you want good coverage.

Your insurance premium is meant to provide you with enough coverage to rebuild or replace your home if something happens to it. When you add a solar panel system to your home, it raises the overall value of your home. This means if something happened to your home, you would need more money to rebuild or replace it. Thus, the amount you pay toward your insurance premium will typically go up.

The location of your solar panels can also increase your premiums. If they are mounted on your home's roof, they are considered to be part of your home, so they're usually covered by standard home insurance. However, solar panels on detached buildings or a ground-mounted solar panel system typically require a supplemental policy, and that could increase your premiums.

Will Homeowners Insurance Cover Solar Panels If They're Leased?

As we mentioned earlier, if you decide to lease your solar panels, then your homeowners insurance generally isn't responsible for covering them. Instead, the company you lease your solar panels from should hold an insurance policy for them, as they are responsible for keeping up with the panels and repairing or replacing them as needed.

If you rent an apartment, you normally aren't responsible for buying a new refrigerator or stove if yours breaks; the landlord is. In this case, think of the solar company you’re leasing from as the landlord of your solar energy system.

That’s why it’s important that you understand the warranty and insurance coverage offered by your solar company, so you can determine if you need additional insurance coverage of your own. For instance, if something happened to the solar panels, and they damaged your roof, you need to know who is responsible for covering the repair of the roof.

Homeowners Insurance and Solar Panels

Homeowners insurance can be a tricky thing, and you should never assume that something will be covered. Therefore, it is essential that you talk to your insurance provider if you are considering adding renewable energy to your home. There is a good chance the panels will be covered under your insurance, but there may be more you need to do.

Not all insurance coverage is the same, so you need to have a full understanding of what is and is not covered by your insurance. If you are putting your solar panels somewhere besides the roof of your home, you might need supplemental coverage, which could cost you more.

Adding solar panels raises the value of your home, so your premium could go up to reflect that. Thus, it’s worth looking into more comprehensive coverage to make sure everything will be covered in the case of an unexpected disaster.

If you lease your solar panels, the company you are leasing from is responsible for insuring them. However, you still want to talk with your insurance provider to see how the two different insurance policies would interact with each other in the case of a claim.

Ultimately, if you decide to go solar, you’ll want to have an in-depth conversation with your insurance company to make sure that you, your home, and your solar panels are fully protected. You can get an estimate of your solar power system size with our free Solar Design Tool, and then use that information to aid the conversation with your insurance agent.

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