Will homeowners insurance include solar panels?

You finally decided to join the green energy revolution, paying for the installation of solar panels on your roof.

It’s a big investment, one you pondered for a long time before doing some research, getting different bids until you found a solar panel installer who did the work well, without interruption and took care of the permit and labor in a timely manner.

Maybe you’ve already started to see the benefits on lower electricity bills, but now you’re wondering, does my home insurance cover my solar panels?

They are now part of your home, right.

The short answer is YES. Most solar panels are considered a permanent attachment to your property and thereby are protected by a homeowners policy.

According to the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL), homeowners insurance typically offers protection against certain risks - usually called perils - that include theft or damage from wind or fire.

However, you should notify your home insurance company to let them know about this addition to your premises so they can make this adjustment in your policy, and to verify that they indeed cover them. Some insurance companies have also been known to offer a small percentage discount for home solar panels because studies show that those who are concerned with saving the environment are less likely to make an insurance claim (one factor that they take into consideration is that this segment of the population is less likely to be smokers and are less likely to cause a house fire.

Keep in mind that roof-mounted vs. ground-mounted panels can have different coverage limitations. 

It’s also important to check the coverage limits to see if the policy covers the damage or loss of your solar equipment entirely, or partially. Your insurance agent should be able to tell you this and whether you need to increase the amount of coverage on your home.

Something else to remember is that this addition in value to your home -- about $15,000 in sale value, according to the U.S. Department of Energy -- will probably mean higher insurance premiums. 

Solar panel carports or ground-mounted panels may even require an add-on or separate policy. Also, if the solar power system is deemed to large, it may warrant a separate policy or add-on rider to your policy.

Solar panels mounted on the ground also fall under the category of “other structures” coverage in a homeowners’ policy.

What type of damage is covered?

If you haven’t added the solar panels to your homes yet, look for a certified installer who can do the work properly. That company should evaluate whether the roof of your home is strong enough to withstand the added weight of the panels and the system. Also, that company should be responsible for any damages to the roof while in the process of installing the system. Ask for an explanation of their warranties before the work begins. 

While the solar panels and the rest of the renewable energy equipment are often covered by robust warranties from the manufacturer or the installer, which encompasses malfunctions or failures due to the installation of the system, these warranties do not cover natural disasters.

The coverage to your solar panels and equipment will often depend on where you live. 

But in general, it should cover:

    Storm damage from high winds, lightning or hail

    Theft/vandalism

    Snow and ice

    Fire damage

   Damage from an aircraft, car or vehicle

   Falling objects

   Water damage

   Explosions

In addition, some states where hurricanes are frequent require Wind Insurance, which is separate from the standard homeowner’s insurance. If you don’t have this coverage and you install solar panels in your home, it is recommended that you look into purchasing this additional coverage.

Also, in states prone to earthquakes, like California, the home insurance policy does not usually cover damages to residence or the solar panels from the actual tremor. Buying earthquake insurance may be a good option for protecting the solar equipment and your property. 

If instead of buying, you decided to lease the solar energy component, the solar company will usually include an insurance policy with the lease agreement or contract. 

Information to have on hand when contacting your insurance agent:

    Where the panels are installed: have your solar installer provide you with the plans

    How many panels are installed

   The solar installer company information

Want to learn more about how to go solar? Check out the HahaSmart blog!

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