Answer: More and more homeowners are starting to realize the benefits of solar panels for their homes. Solar panels reduce your energy bills and carbon footprint, and are a great way to increase the resale value of your home. However, the cost of solar panels can be very high and homeowners want to know that their investment is protected in the event of damage. The answer to the question: Does home insurance cover solar panels? It depends on several factors. Although solar panels may be covered by home insurance if they are damaged in an accident, some policies may exclude solar panel systems altogether. In this case, homeowners can purchase separate solar insurance to protect their panels.
Home insurance covers rooftop solar panels as part of your home insurance.
Photo: istockphoto.com
People who install home solar panels on their roofs may be relieved to know that this equipment is usually covered by their home insurance. Rooftop solar panels are usually covered by your homeowner's insurance policy.
Home insurance typically includes roof repair or replacement after an insured event occurs. This coating is typically applied to solar panels permanently installed on the roof. However, it is recommended to check with your insurance company about home insurance coverage exclusions. This helps homeowners know if their panels are covered before damage occurs. Some policies may exclude solar panels entirely or require special support to protect this equipment.
Residential coverage protects a home's structure from hazards such as snow, wind, and fire within legal limits — and this coverage often extends to solar panels.
The residential portion of many home insurance policies includes coverage for risks that can damage solar panels, including hail, wind and fire. For example, if snow damages permanently installed solar panels on your roof, your home insurance policy can help cover repairs.
Homeowners may want to remember that solar panel system coverage is determined by their insurance policy. However, because they generally reflect the cost of replacing the entire home structure, home coverage limits are often quite high. In addition, the policy deductible will affect the premium amount. The insurance company will deduct the deductible from the approved payment to pay for the repair or replacement of the solar panel. For example, if a claim for $5,000 is approved on a policy with a $1,000 deductible, the policy will receive $4,000 in repairs.
It's important to carefully check the terms of your home insurance policy, as some insurance companies exclude hurricane damage or damage to solar panels during installation.
Each homeowner's insurance policy is recognized, so policyholders can ask their insurance agent about solar coverage. Some insurance companies do not cover damage to solar panels caused by certain storms. For example, Matt Barber, managing partner of PCF Insurance Services in Spanish Fork, Utah, points out that some companies may deny claims if solar panels are damaged by hail, a risk typically covered by homeowners insurance.
“Most home insurance policies cover weight, loss and damage to solar panels due to fire, wind, rain, snow and ice in a typical home insurance policy,” he said. “Some areas of the country may have restrictions on snow damage, so it is important to check with your insurance company before installing solar panels.”
Insurers may also exclude coverage for solar panels entirely, even if they are attached to the roof. With this in mind, owners may want to check the terms and conditions associated with this type of equipment.
Policies can cover damage caused by the installation of solar panels. But the best solar companies (like SunPower and ADT Solar) often guarantee the quality of their installation work, so they cover the cost of repairing any damage that occurs during the process. In this case, the homeowner may never have to file an insurance claim. While there are options for DIY solar panels, homeowners who install the panels themselves must pay out of pocket for repairs that cause damage during installation.
Other structures can be covered with ground-mounted or free-standing solar panels, but this depends on the insurance company and policy terms.
A standard homeowners insurance policy typically includes coverage for “other structures,” which generally includes separate buildings and structures located on the property. For example, external building protection often extends to the garage or outside gardens to protect against hidden dangers such as fire, hail and vandalism.
Solar panels installed on a separate building, such as a detached garage, may still be covered by your home insurance. Additionally, some insurance companies may cover ground-mounted solar panels as part of other terms of their policy. It is important to keep in mind that coverage limits for other buildings are often much lower than coverage limits for residences. Even with the best home insurance, individual structures are only insured for up to 10% of the home insurance coverage amount. Since coverage can vary between insurance companies, homeowners with solar panels that are not connected to their primary residence may want to contact their insurance company for clarification.
Photo: istockphoto.com
Insurance companies may offer coverage for different types of solar panels, such as those installed on a garage or shed.
Although solar panels installed in a parking garage may be protected by other structural coverage, this insurance may not be enough to cover the cost of repairing or replacing the damaged unit. As noted, coverage for other structures may be limited to 10% of the total coverage limit of a homeowner's insurance policy, although policyholders often have the option of increasing their policy limits for an additional fee.
Even in cases where your standard home insurance doesn't cover this equipment, solar panel coverage may be available with separate endorsements. This adds another cost to the policy buyer's insurance costs, but the protection of the best solar panels against covered risks may be worth it.
Additionally, some insurance companies offer separate policies to protect individual or ground-mounted solar panels.
If policyholders can't find the coverage they need through home insurance, it may be beneficial to purchase solar insurance separately. Although some insurance companies may offer policies that cover individual solar panels, they may be available from solar panel companies when homeowners purchase and install their own equipment.
In general, solar insurance covers the same risks as a home insurance policy. Fire and hurricane damage are usually included in solar panel insurance. On the other hand, damages caused by earthquakes and floods are excluded from insurance coverage. Covered lines and exclusions are usually specified in small print in the separate policy for solar panels.
State governments may require homeowners to carry additional liability insurance if solar panels damage the power grid or injure maintenance personnel.
Although the efficiency of solar panels can help homeowners reduce energy costs and carbon emissions, in some cases installing solar panels may pose a risk to the power grid or maintenance personnel. For example, a poorly installed solar panel can damage the local power grid. Likewise, a faulty solar panel can cause excessive current that can seriously injure utility workers.
Some state and local governments address these risks by requiring homeowners to carry additional liability insurance for solar panels. Although standard home insurance policies include liability coverage, the coverage amount may not meet local requirements. In these cases, homeowners can increase the limits of their liability coverage or purchase separate liability insurance to meet their obligations as a solar equipment owner.
When choosing an insurance policy, homeowners may want to increase coverage limits to repair or replace expensive solar equipment after a loss.
Many homeowners across the country decide that solar panels are worth the initial investment. But before adding tags, homeowners are advised to review their insurance coverage and requirements. Although many standard home insurance policies protect roof-attached equipment, not all insurance companies always cover solar panels.
Although many insurance companies offer homeowners several ways to get the coverage they need. If they need additional insurance to protect their solar system, homeowners can easily increase their policy limits to cover dwellings, other structures, or liability. When reviewing the terms of their insurance policy, homeowners may want to consider deductibles and make sure the damage to their solar system does not exceed that limit and is not too high. If the cost of repairing damage to the solar panels is less than the deductible, the insurance company will not pay compensation, even if it is covered by your homeowner's insurance policy.
Alternatively, homeowners may consider purchasing separate solar insurance or adding an endorsement to their existing home insurance policy. Adding coverage for solar panels generally increases insurance premiums, so homeowners may want to shop around to get the best deal.
And snow? Are my solar panels insured? | Home Solar Energy Questions and Answers
