A new solar project is installed in the United States every 100 seconds, according to the Solar Energy Industries Association. Solar power is clearly on the rise, and it’s not hard to see why it’s such a bright idea.
Solar power generation offsets more than 73 million metric tons of carbon dioxide emissions, or the equivalent of taking 15.6 million vehicles off the road, and a residential system can save the average California household nearly $30,000 on electricity over 20 years. Plus, with the cost of solar installation down by more than 70% over the last decade, it’s more affordable than ever for homeowners to invest in solar energy.
A solar panel energy system is a big investment that can set you back anywhere from $15,000-$25,000, according to the Center for Sustainable Energy. Before you bask in the glow of energy savings, you’ll want to be sure you have enough homeowners insurance to protect you and your panels.
Does Homeowners Insurance Cover Solar Panels?
Most homeowners insurance policies include coverage for solar panels. That’s because most rooftop solar panels or tiles are considered a permanent attachment to your property, similar to a deck, patio or security system, and are therefore protected by homeowners insurance in the event of a covered loss, up to the policy’s limits.
Ideally, your existing insurance policy should provide enough protection to cover all of your assets if you were to lose everything. There are four main areas of homeowners insurance coverage:
- Dwelling coverage to rebuild or repair your home’s structure and any permanent attachments, such as solar panels.
- Personal property coverage to replace damaged or destroyed property inside your home.
- Liability coverage to provide financial protection if someone were to get injured on your property and file a lawsuit.
- Additional living expenses coverage to pay for the necessary additional living expenses incurred if you’re required to move out of your home while it is repaired or rebuilt.
Since a solar panel system is typically considered a permanent attachment, it’s covered under the dwelling coverage component of your homeowners insurance policy. This means that your policy could provide protection for your solar panels in the event of perils including, but not limited to:
- Falling objects
- Fire damage
- Snow and ice damage
- Storm damage caused by wind, lightning, hail or tornado
- Theft and vandalism
- Water damage
How much solar panel insurance coverage do I need?
There are a few things that can impact your solar panel coverage, including:
- The location of the solar panels (Is it a rooftop or ground-mounted system?)
- The contractor used to install the solar panels
- The type of solar panels
- The number of solar panels
Your insurance provider can help you determine these details and make any necessary changes to your coverage.
Thinking About Installing Solar Panels? Here’s What You Need to Know.
Installing a solar panel energy system to your home is a major change, and it might require you to make some changes to your homeowners insurance too.
Not all solar panel systems are covered by homeowners insurance.
There may be some coverage restrictions depending on your insurance provider and the type of solar panel system you install. That’s why it’s critical to talk with your insurance provider to verify that your system will be covered before you go through with the installation. Under your insurance policy, systems such as a solar panel carport or ground-mounted system may warrant an add-on (also known as an endorsement or rider) or a separate policy.
You will probably need to increase your coverage limits.
A rooftop solar panel system will likely increase the value of your home. According to researchers at Lawrence Berkeley National Laboratory, each kilowatt of solar energy adds $5,911 to a home’s resale value. When you consider that most homeowners install systems that are 10 kilowatts or higher, it’s surprising to see just how much value solar panels can add.
Many solar panel owners don’t realize that they need to increase their dwelling coverage limit to account for the boost in home value. Since your homeowners insurance is only good up to your policy’s limits, you want to make sure your coverage reflects the value of your home with solar panels.
Solar panels have a lot of benefits, but they aren’t without risks. In the event of a house fire, panels can continue to generate electricity during the blaze, increasing the risk of electrocution, slips and falls, and other injuries, which could prevent firefighters from saving the structure. You may want to increase your dwelling and liability coverage limits.
Solar panels will likely increase your insurance premium.
As the value of your home increases, so do your coverage limits—and that means your premium will probably increase too. One of the main reasons why you want solar panels in the first place is to save money, but paying a higher premium ensures that you carry adequate coverage and, in turn, will face less of a financial setback if you ever experience a covered loss.
You might not be covered for damage during installation.
Installing solar panels isn’t exactly a weekend DIY project. It’s a tremendous job. Accidents can—and do!—happen. Solar panels are already expensive, so imagine your surprise if you wind up with a gaping hole in your roof during the install and have to foot the bill for that too.
Ask your insurance provider whether your coverage extends to the installation process. That way, you’ll be able to make necessary alterations, particularly to your dwelling or liability coverage limits. Additionally, reputable solar providers usually offer workmanship warranties that can help protect your finances if your home or solar panels are damaged during installation.
If you’re leasing your solar panels, you might not need to worry.
If you install a solar panel system with a lease or power purchase agreement (PPA), you’re not the owner of the system. Technically, your lease or PPA provider owns the system and is therefore responsible for damage and maintenance. Although it’s not your responsibility to ensure coverage, it’s wise to talk to your lease or PPA provider before installation to verify that if damage occurs, it will be covered.
Shopping for Solar? Follow These Tips.
Investing in solar panels is a big decision, and finding the right installer is critical. Although larger, more well-known companies may seem more reputable, they often inflate their prices. If you want to save money on solar, shop around for multiple quotes and don’t overlook smaller, local installers. The EnergySage Solar Marketplace is a great place to compile solar panel quotes, and their solar calculator can provide a rough estimate for installation.
Solar panels prove to be a good investment, as they lower your electricity bill while increasing the value of your home and doing something positive for the environment. Make sure you’ve protected that investment before, during and after installation with adequate homeowners insurance coverage from Personal Express Insurance. Our friendly, local agents can help design a policy that keeps your solar panel system protected, whether you’ve just started shopping for solar or need to update your coverage. Find a Homegrown Pro near you or call 1-800-499-3612 for more information.
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