Do Solar Panels Affect Homeowners Insurance?

Homeowners insurance provides financial protection for one of life’s most significant investments: a home. This coverage safeguards against various unexpected events, offering peace of mind by mitigating the financial impact of damage or loss. Policies typically cover the physical structure of the dwelling, personal belongings, and liability for injuries or property damage to others.

Homeowners Insurance Coverage for Solar Panels

Solar panels are generally included under a standard homeowners insurance policy, often considered a permanent attachment to the home’s structure. If installed on the roof, they usually fall under the dwelling coverage section of the policy. This section protects the main house and attached structures, including fixtures like solar panel systems.

For solar panels that are not affixed to the main residence, such as ground-mounted systems or those on a detached garage or shed, they are typically covered under the “other structures” portion of the policy. Homeowners should verify with their insurer how ground-mounted systems are classified, as some policies may require additional coverage.

Most homeowners insurance policies extend coverage to solar panels for common perils. This typically includes damage from events like fire, wind, hail, lightning strikes, theft, vandalism, and falling objects. However, some policies may specifically exclude damage caused by wind or hail, especially in regions prone to severe weather.

While standard policies cover many risks, certain scenarios are typically not covered. For instance, malfunctions, general wear and tear, floods, or earthquakes usually require specific additional coverage. If solar panels are leased, the leasing company often carries the insurance, so homeowners should clarify who is responsible for coverage.

Factors Influencing Insurance Premiums

Installing solar panels can influence homeowners insurance premiums. The addition of solar panels often increases the home’s overall value and replacement cost. Since dwelling coverage limits are tied to replacement cost, a higher value typically necessitates increased coverage, leading to a higher premium.

Beyond increased property value, liability risks can also affect premiums. If a solar panel system causes damage to a neighbor’s property or injures someone working on or near the panels, the homeowner could be held liable. Some utility companies may even require a higher liability limit for homes with solar panels, potentially necessitating an umbrella policy.

Insurers also consider the total cost and size of the solar panel system. Higher-value systems require more coverage, increasing premiums. Installation quality also plays a role; panels installed by licensed professionals following safety standards may be viewed as lower risk. A homeowner’s claims history can also influence premiums, with frequent claims potentially resulting in higher rates. Premium increases can vary, ranging from a few dollars to a few hundred dollars monthly, depending on location, insurer, and system specifics.

Preparing to Inform Your Insurer

Before contacting an insurance provider about solar panel installation, gather specific information and documentation. Begin by compiling the total cost of the system, which is essential for the insurer to assess the added value and dwelling coverage needed for the new investment.

Collect detailed information about the installer, including their company name, contact details, and proof of licensing and certifications. Also provide the installation date. Specifics about the panels, such as their type, specifications, and total wattage, help the insurer understand the system’s nature and value.

Document any warranties associated with the solar panel system. These warranties can influence how an insurer assesses risk and potential future claims. Photographs of the installed panels also provide visual documentation for the insurer’s records, aiding in valuation and risk assessment.

Updating Your Homeowners Policy

After gathering all necessary information, formally update your homeowners insurance policy. Contact your insurance company through your agent, an online portal, or an in-person meeting to inform them of the significant addition to your property.

During this interaction, present the detailed information collected, including the system’s cost, installer details, and panel specifications. The insurer will review this data to assess the policy’s impact, potentially adjusting dwelling coverage limits to reflect your home’s increased replacement value. Discuss potential policy adjustments, such as new endorsements or riders, to ensure comprehensive coverage for the solar panels.

Understanding any new policy terms, revised premiums, and deductibles is essential. Once adjustments are agreed upon, the insurer will process updates and issue new policy documents. Carefully review these updated documents to confirm adequate coverage for the solar panels. In some instances, the insurer may request a home inspection to verify the installation and assess new risks.