Do Solar Panels Increase Homeowners Insurance & Other Insurance Question

When considering to install solar panels, it’s important to consider how your home insurance will be affected. As solar panels become more popular, questions about how they interact with home insurance policies have started to emerge. Home insurance, a crucial component of homeownership, provides protection against various perils, but does it extend its coverage to include solar panel installations? In this article, we’ll explore the intricate relationship between solar panels and home insurance, shedding light on whether your insurance policy can shield your renewable energy investment, and to what extent your solar panels are protected.

In This Article:

• Does Homeowners Insurance Cover Solar Panels?
• Do Solar Panels Increase Homeowners Insurance?
• Which Insurance Companies Cover Solar Panels?
• Does Homeowners Insurance Cover Damaged Solar Panels?
• Is Liability Insurance Needed for Solar Panel Installation?

DOES HOMEOWNERS INSURANCE COVER SOLAR PANELS?

Yes, most insurance companies cover solar panels under a homeowners insurance policy. However, there are important details that come with this coverage, including the location of your solar panels.

Homeowners insurance policies typically categorize coverage for solar panels based on their location on your property. For instance, if you have solar panels installed on your rooftop or attached to your home or garage, they fall under the umbrella of your main dwelling coverage. This coverage not only safeguards the physical structure of your home, but also extends to any permanent attachments, including items like patios, HVAC, generators, security systems, solar panel systems, and similar structural fixtures.

Conversely, if your solar panels are ground-mounted or connected to a structure separate from your primary residence, they would likely fall under the domain of the “other structures” portion of your homeowners insurance. Typically, the coverage limit for other structures is a percentage of your dwelling coverage limit, commonly set at 10%, although some insurers offer the option of higher limits. Should you choose to install solar panels on a detached garage, shed, or mount them on the ground within your property, it’s advisable to consider increasing the limit of your other structures coverage to ensure adequate protection.

In scenarios where residential solar panel systems aren’t automatically covered by your policy, your insurer may offer optional solar panel coverage, often referred to as an endorsement. This endorsement can be added to your policy for an additional fee, providing you with the necessary coverage for your solar panels.

 DO SOLAR PANELS INCREASE HOMEOWNERS INSURANCE?

Although solar panels don’t directly increase homeowners insurance premiums, installing solar panels on your home may require you to increase your coverage limits or add protections to your policy to be fully protected. These coverage limit and protection adjustments can potentially increase your homeowners insurance rates.

As reported by Zillow and the Department of Energy, solar panels can increase your home’s value. And just like other home improvements and renovations, this added value generally increases a home’s replacement cost. A home’s replacement cost represents the total cost required to rebuild your entire property in the case of a catastrophic event. Since your insurance policy’s dwelling coverage limit should be equal to the replacement cost of your home, your insurance rates will likely increase once you update your policy to account for the solar panels.

WHICH INSURANCE COMPANIES COVER SOLAR PANELS?

Many reputable insurance companies offer coverage for solar panels. However, the extent of coverage and available options may differ. It’s essential to shop around and compare policies from multiple providers, considering factors such as coverage, deductibles, and premiums. Additionally, consult with your solar panel installer, as they may have insights into insurance companies experienced with solar panel coverage.

DOES HOMEOWNERS INSURANCE COVER DAMAGED SOLAR PANELS?

Whether homeowners insurance covers damaged solar panels depends on your specific policy and the circumstances surrounding the damage. Here are some key things to consider when determining if your home insurance will cover damaged solar panels.

Most homeowners insurance policies will cover damage to solar panels caused by covered perils. These perils may include hail, wind, fire, lightning strikes, falling trees, vandalism, and theft. If the damage results from any of these covered events, you should typically be eligible for coverage. Some home insurance policies may also cover damage to solar panels caused by electrical malfunctions within the solar panel system. Check your policy to determine if such coverage is included.

Review your insurance policy carefully to understand the extent of coverage for solar panels. Some home insurance policies may explicitly include solar panels in the coverage for the dwelling or other structures, while others may require a separate endorsement or rider for solar panels. If your policy does not automatically cover solar panels, check with your insurance provider to see if they offer optional solar panel coverage that can be added to your policy for a fee.

Keep in mind that even if your policy covers solar panels, you may still be subject to a deductible. This deductible represents the out-of-pocket amount you must pay before your insurance kicks in to cover the rest of the repair or replacement costs. 

In the event of damage to your solar panels, it’s essential to document the extent of the damage thoroughly. Take photographs, keep records of repairs or estimates, and promptly notify your insurance provider to initiate the claims process.

IS LIABILITY INSURANCE NEEDED FOR SOLAR PANEL INSTALLATION?

Yes, liability insurance is typically needed during solar panel installation. Solar panel installations can be a complex process that involves workers and equipment on your property, and it carries inherent risks. Liability insurance serves as a crucial form of protection for both you as the homeowner and the installation professionals.

If a solar installer or contractor is injured while installing solar panels on your property, liability insurance helps cover their medical expenses and any potential legal costs that may arise from a liability claim or lawsuit. In the event of an accident or injury during installation, liability insurance can help protect you from personal liability. Without it, you could be personally responsible for medical bills, legal fees, and damages awarded in a lawsuit.

Liability insurance also provides coverage for accidental damage to your property that may occur during the installation process. This includes damage to your roof, structural components, or other parts of your home.

Reputable solar panel installation companies typically carry their own liability insurance, but it’s essential to verify this before hiring them. Ensuring that the installation team has adequate liability coverage provides an extra layer of protection for you and your property.

Before starting any solar panel installation project, it’s advisable to verify that the installation company or contractor has liability insurance and ask for proof of coverage. Review your own homeowners insurance policy to understand how it might interact with the installation process and any potential liabilities. If necessary, consult with your insurance provider to discuss the specific coverage you may need during the installation.

HOMEOWNERS INSURANCE AND SOLAR PANELS

Installing solar panels is a wise and environmentally conscious decision that can offer numerous benefits, including potential energy savings. However, it’s crucial to understand the implications for your homeowners insurance to ensure that your investment is adequately protected. Review your policy, communicate with your insurer, and consider any necessary adjustments to coverage to enjoy the benefits of solar energy with peace of mind. Solar panels and homeowners insurance can coexist harmoniously with proper planning and understanding of your policy’s terms and conditions.

To learn more about solar and how much you could save with solar, contact Green Ridge Solar today.

Also try out our Solar Calculator to estimate how much you could save with solar panels.