How Much Does Home Insurance Go Up With Solar Panels?
Understand how solar panels affect your home insurance premiums and coverage, and learn strategies to manage potential cost changes.
Installing solar panels offers long-term energy savings and increases property value. This enhancement, however, also influences homeowners insurance. Understanding how these systems affect coverage and premiums is important for homeowners considering this investment.
Understanding the Impact on Premiums
Home insurance premiums typically increase after solar panel installation because the system adds considerable value to the property, raising its overall replacement cost. Insurers assess this increased value, which can range from $15,000 to $25,000 for a rooftop system, and adjust coverage limits to adequately protect the enhanced asset.
The addition of solar panels can also introduce new risks that insurers account for when calculating premiums. These risks include potential damage to the panels themselves from perils like hail, wind, or fire, as well as liability concerns if the system causes injury or property damage to others. While some homeowners might see a modest increase, perhaps around $84 per year on average, others could experience higher adjustments, potentially a few hundred dollars annually. The exact premium change is highly variable, influenced by the system’s size and cost, the homeowner’s geographical location, and the specific insurer’s risk assessment.
Key Insurance Coverage Considerations
Most standard homeowners insurance policies generally include coverage for rooftop solar panels as they are considered permanent attachments to the dwelling. If the panels are damaged by a covered peril, such as fire, lightning, or vandalism, they would typically fall under the dwelling coverage portion of the policy. However, the extent of coverage can depend on how the panels are installed and classified by the insurer.
Solar panels not attached to the roof, such as ground-mounted systems or those on detached structures like carports, are often covered under the “other structures” portion of a policy. This coverage typically has a lower limit, often around 10% of the dwelling coverage, which might not be sufficient for the cost of the solar installation. For specific risks like power surges or accidental damage, a homeowner might need to add a policy rider or endorsement to ensure comprehensive protection. Homeowners leasing their solar panels should verify coverage with the leasing company, as they often maintain their own insurance for the equipment.
Information for Your Insurer
When installing solar panels, homeowners should proactively communicate with their insurance provider. Providing detailed information about the new solar energy system allows the insurer to accurately assess the added value and any associated risks. This transparency helps ensure the homeowner has appropriate coverage.
Key details to share include:
Total cost of the solar panel system
Specific type of panels being installed
Name of the professional installer
Installation date
System’s wattage or capacity
Whether the system is grid-tied or off-grid
Strategies for Managing Costs
Homeowners can explore several strategies to manage increases in home insurance premiums after installing solar panels. Obtaining quotes from multiple insurance providers is a straightforward approach, as different companies may assess the risk and value of solar installations differently. Some insurers offer specific discounts for homes equipped with solar energy systems, recognizing their energy efficiency or the homeowner’s proactive approach to property maintenance. Inquiring about such “green” or energy-efficient home discounts can lead to savings.
Bundling home insurance with other policies, such as auto insurance, can often result in overall premium reductions across all policies. Homeowners might also consider adjusting their policy’s deductible; choosing a higher deductible typically lowers the annual premium, though it means a greater out-of-pocket expense in the event of a claim. Ensuring the solar panels are installed by certified professionals and adhering to recommended maintenance schedules can also help manage costs by reassuring insurers of the system’s safety and reliability.