How Do Solar Panels Affect Home Insurance?
Solar panels can now be found on over one and a half million homes as of 2018. There are a number of benefits to installing solar panels. For a start, they generate electricity and reduce your energy bill. They also help to improve the value of your house by up to tens of thousands of dollars. Investing in solar panels marks a significant investment for your home. This is more than enough to leave people wondering if they need to get specific solar panel insurance or if their home insurance policy will cover them.
The good news is that solar panels are covered by most home insurance policies
After you have solar panels installed on your rooftop, they are considered to be a part of your home with most insurance policies. This means that – in most cases – getting your solar panels covered by your home insurance won’t create an add-on (or “rider”), won’t cause a change in the insurance plan, and won’t lead to an increase in premiums. With all that said, each insurance policy is different. That is why you should call the insurance company to ensure that your panels are covered in the insurance policy.
While your solar panels are likely going to be covered by your insurance, there are some things you should keep in mind:
The insurance company may require separate policies or add-ons for certain kinds of solar panel systems. Rooftop solar panels are generally covered in standard policies, but your insurer might not cover a different kind of installation; such as solar panel carports and ground mounted solar panels. Whether these separate systems will be covered or not depends on the insurance policy in question. You might also be able to get a spate policy or add-on if the system is large enough to warrant having individual coverage.
Solar is remarkably value, so you might want to raise your coverage limit. The coverage limit for an insurance policy is how much the policy will pay towards a loss covered by the policy. The cost of an average 5-kilowatt solar panel in 2018 is $10,990 after tax incentives and rebates. Most homeowners install systems of 10 KW or higher, meaning that the solar panel is an investment worth tens of thousands of dollars. While solar panels will likely be covered under the standard home insurance policy, you might want to discuss raising your coverage limit with your insurer. This way, you can be sure that you have been covered for every eventuality.
Something else to keep in mind is the installation process. Your current insurance may or may not cover any potential damage caused as solar panels are installed. When you contact an insurer to ask whether they will cover the solar panels, be sure to ask them if this coverage will extend to the installation process. A qualified solar installer will typically provide workmanship warranties. These warranties cover you in the unlikely event your roof or solar panels are damaged during the solar panel installation process.
There are some other factors involved in determining how solar panels can affect the cost of your home insurance. Whether you own your panels outright or have leased them will affect your home insurance policy. If the solar system is installed using a lease or Power Purchase Agreement (PPA), then technically you are not the legal owner of the system. The company that you made the agreement with are their legal owners and are therefore responsible for keeping them maintained. In this situation, there’s no need to worry about whether or not the panels are covered by your home insurance. However, you definitely need to take a look at the fine print of any PPA or lease before signing it to ensure that the solar panels will be protected in event of an issue.
You should ensure that the solar panels came from a well-vetted installer no matter what kind of home insurance you own
Something to keep in mind about solar panels is that they are remarkably durable. They are built to last for up to 25 years after all. The companies that design and create solar panels test them using real-life conditions. They want to be sure that their panels will be able to stand the typical wear and tear they will go through, as well extreme weather conditions. This includes verifying they are able to stand against hail, snow, and heavy winds. Solar equipment will also come with warranties that have terms and conditions to consider; having a strong solar power warranty on your side ensures that the system continues to produce clean and emission-free energy for decades to come.
Of course, not all solar panels will be created equal. Compare and contrast different solar panel options to find the one that has the warranties and equipment certifications for you. Get one that has everything you need. You should also check around different solar installers. Find one with a design and workmanship warranty that demonstrates that they stand behind their work and guarantee it.