Does Homeowners Insurance Cover Solar Panels?

Solar panels are an increasingly popular home improvement, offering environmental benefits and potential energy cost savings. Understanding how these systems are protected under existing insurance policies is important to ensure adequate financial protection.

Standard Homeowners Policy Coverage

Most standard homeowners insurance policies extend coverage to solar panel systems. The way solar panels are classified under a policy depends on their installation method. If the panels are permanently attached to the roof, they are considered part of the dwelling structure and are covered under Coverage A (Dwelling) of the policy.

Conversely, ground-mounted solar arrays are categorized as “other structures” and fall under Coverage B of the policy. This distinction is important because Coverage B has a lower coverage limit, typically around 10% of the dwelling coverage. Standard policies cover perils such as fire, lightning, windstorms, hail, theft, and vandalism. Any coverage provided is subject to the policy’s overall limits and the homeowner’s deductible.

Determining Your Coverage Needs

The total investment in a solar panel system significantly influences a homeowner’s coverage requirements. The average cost for a residential solar installation can range from $15,000 to $50,000 before tax credits. This substantial addition to a property’s value may necessitate reviewing and increasing the dwelling coverage limit to ensure the home’s full replacement cost, including the solar system, is adequately covered.

The type of solar panel installation also plays a role in assessing coverage needs. Roof-integrated solar tiles are inherently part of the home’s structure, while ground-mounted systems, being separate, require closer attention to the “other structures” coverage limits. A home’s location can also affect coverage, especially in areas prone to specific natural disasters. Standard homeowners policies exclude perils like earthquakes and floods, meaning homeowners in such regions may need separate policies or endorsements to cover solar panels against these events.

Enhancing Your Solar Panel Protection

Homeowners should inform their insurance provider about the installation of solar panels. This notification allows the insurer to update the policy to reflect the increased value of the property and ensure the solar system is included in the coverage. Failing to inform the insurer about such a significant home improvement could impact future claims.

Enhance solar panel protection by adding a specific endorsement or rider to the existing homeowners policy. These endorsements can provide specialized coverage or higher limits tailored to solar equipment. Homeowners may also need to increase their dwelling coverage limits for roof-mounted systems or increase “other structures” coverage for ground-mounted arrays to fully account for the system’s value. Reviewing policy details with an insurance agent helps clarify coverage specifics, understand any exclusions, and confirm deductibles, ensuring comprehensive protection for the solar energy investment.