Homeowners Insurance Coverage For Solar Panels – As more homeowners pour money into renewable energy solutions, a lot of them wonder how these electricity solutions affect their current insurance policies. One of the most popular and most used energy solutions among homeowners is solar panels. Although they help when it comes to saving energy, they are associated with some insurance considerations.
If you would like to understand whether and how insurance policies cover solar panels, you are in the right place. In this article, I will be answering the question many homeowners ask themselves: does homeowners insurance cover solar panels? Therefore, at the end of this blog post, you will have peace of mind and will not have to worry about the financial burden that comes with your energy solution.
Homeowners Insurance Coverage For Solar Panels
Normally, homeowners insurance extends its coverage to solar panels because it is a part of the home structure, especially if they are installed on the roof. However, the specifics can differ depending on your policy details and your insurance provider. With this in mind, it is important to find out what your policy covers and the terms they fall under as some quotes need additional adjustments or riders to add full coverage.
What Type of Solar Panel Damage is Covered?
Homeowners insurance typically covers damage to solar panels under the same conditions as they are a part of your home structure. Here are the covered risks that home insurance covers:
- Fire.
- Storms.
- Vandalism.
- Theft.
- Falling objects.
However, damage caused by intentional damage, poor maintenance, and wear and tear will not be covered by your policy; natural disasters are included.
When Does Home Insurance Cover Solar Panels?
Here are some scenarios when you receive coverage for your solar panel from your home insurance:
Structure of Your Home
If your solar panels are installed on the roof of your home, they are generally considered part of your home’s structure. Most standard homeowners insurance policies cover the structure of your home against threats like vandalism, fire, windstorms, lightning, and hail. Hence, if your solar panel is destroyed by a covered peril, you will receive reimbursement.
Other Structures Coverage
If your solar panels are installed on a shed, garage, or other structure of your property, they may be covered by your home insurance under the other structures part of your policy.
Personal Property Coverage
If your solar panels are not installed permanently, in some cases, they may be covered under the personal property section of your quote.
When Does it not Cover this?
You will not receive coverage or reimbursement from your homeowner’s insurance if the following causes damage to your solar panels:
Negligence
If damage is caused to your solar panels as a result of neglect or lack of maintenance, your insurance company may not offer coverage. Thus, if you file a claim, it will be denied.
Wear and tear
Standard homeowner policies do not cover wear and tear. Solar panels, just like other parts of your home, can degrade with time, and this can cause normal wear and tear to your property, which will not be covered.
Specific Exclusions
Some policies have exclusions regarding solar panels, especially if they are under a power purchase agreement or are leased. Therefore, your home insurance policy will not cover it since it does not belong to the homeowner (you).
Earth Movement and Floods
Most standard homeowners insurance policies do not cover damage caused by earth movements and floods.
Can Solar Panels Increase Your Home Insurance Rates?
Yes, installing solar panels can potentially increase your home insurance rates. This is because the cost of replacing your home might increase, and solar panels, which are high-value items, can cause your premium to increase. This is why it is important to assess the possible increase against the environmental benefits and energy savings that solar panels offer.
Frequently Asked Questions
Do I need to notify my insurance provider if I install solar panels?
Yes, you should notify your insurance provider before installing solar panels. This ensures that your coverage is updated, and it provides an opportunity to discuss if additional coverage is needed.
Are solar panels covered if they are leased or under a power purchase agreement (PPA)?
Coverage for leased solar panels or those under a PPA can be more complex. In these cases, the company that owns the solar panels might carry insurance for them. You should review your lease or PPA agreement and speak with your insurance provider to understand where your responsibilities lie.
What happens if my solar panels are damaged during a natural disaster?
Coverage can vary by location and the specific terms of your policy. Generally, solar panels are covered in the event of a natural disaster, but there may be exceptions or limitations based on your area’s risk for certain events. Always check the specific terms of your disaster coverage.
Are portable solar panels covered under homeowners insurance?
Portable solar panels may not be covered under the standard homeowners insurance policy since they aren’t a permanent part of the home structure. You might need specific personal property coverage to protect portable solar panels.
How do I ensure that my solar panels are fully covered by insurance?
Review your current homeowner’s policy and speak directly with your insurance provider to discuss specific coverage for solar panels. Consider asking about any additional riders that may be necessary to provide full coverage.