If your solar panels are permanently attached to your home, like panels on the roof, your homeowner’s insurance may cover them as part of your home coverage. Ground-mounted panels and other solar panels that aren’t attached to your home may be covered by your homeowners insurance under the “other structures” section. However, some insurance policies exclude coverage for solar panel damage caused by wind or hail. Solar panels can be a great investment for your home, but before you put them up, you should make sure your coverage is complete to protect your investment.
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Installing solar panels on your home can help reduce your energy costs and carbon footprint. But how much will it impact your homeowners insurance premiums? Many homeowners wonder if adding solar panels will cause their insurance rates to skyrocket.
The good news is, in most cases, solar panels have minimal effect on homeowners insurance costs. Here’s a look at why insurers generally don’t charge more for homes with solar installations, along with tips for getting the right coverage.
Why Solar Panels Don’t Usually Increase Home Insurance Rates
There are a few key reasons why having solar panels doesn’t typically raise your homeowners insurance premiums:
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Solar panels don’t increase risk – Insurers price policies based on risk factors. Solar panels don’t make a home more susceptible to damage from common perils like fire, theft or severe weather.
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Panels improve home value – Solar arrays actually enhance property value, Insurers look favorably on upgrades that increase a home’s rebuild cost
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Minimal claims – Very few homeowners insurance claims involve solar panels. With limited solar-related losses, insurers have no need to hike rates.
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Incentives for green energy – Some insurers offer discounts for environmentally-friendly features like solar panels to attract eco-conscious customers.
So rest assured, going solar shouldn’t break the bank when it comes to your homeowners insurance premiums. However, it’s still smart to understand how solar panels impact coverage.
How Solar Panels Affect Homeowners Policy Details
While your insurer likely won’t charge more for solar panels. your policy details may need tweaking after an installation
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Update dwelling coverage limit – Adding solar increases your home’s value. Review your dwelling limit to ensure you have enough coverage to rebuild.
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Check exclusions – Some insurers exclude solar equipment from wind/hail coverage. Make sure your panels are fully protected.
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Review detached structure limits – If panels are freestanding, your relatively low “other structures” limit may insufficiently cover them.
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Add specialty equipment coverage – Extra coverage for costly items like solar equipment may be wise if your policy lacks it.
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Examine your deductible – If you have a high wind/hail deductible, you’ll pay more out-of-pocket for solar panel repairs after such storms.
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Lease considerations – Leasing solar equipment may shift insurance responsibility to the leasing company. Check your lease terms.
Factors That Could Increase Rates
While solar panels generally don’t drive up insurance costs, there are some scenarios where having panels could mean paying higher premiums:
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Older roofs – Insurers may worry old roofs can’t handle the added weight of panels, raising risk.
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Pre-existing roof damage – Any existing roof defects or leaks may cause concerns about further damage from panel installations.
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High-risk areas – Homes prone to wind and hail events may face higher premiums for full solar coverage.
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Claims history – After putting in panels, any wind or hail claims for resulting roof damage could prompt rate hikes.
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Panel malfunctions – Faulty installations that cause fires or water damage from leaking could impact premiums after claims are filed.
The key is being upfront with your agent about the age and condition of your roof before installing panels. Discuss any concerns the insurer may have and potential rate increases.
Tips for Insuring Your Solar Panels Affordably
Here are some tips for making sure your new solar array is covered affordably:
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Shop around for quotes, being sure to ask about solar discounts.
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Inquire about any exclusions or coverage gaps for panels.
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Raise dwelling and detached structure limits if needed to fully cover panels.
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Add specialty equipment or scheduled personal property coverage if available.
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See if you can pay a little more in premiums to reduce or eliminate the wind/hail deductible.
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Have panels properly installed by certified professionals to minimize fire/leak risks.
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Keep roofs well-maintained and address any issues promptly to avoid insurer concerns.
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File claims judiciously and only when absolutely necessary. Too many claims could mean higher premiums.
Insuring Your Investment Doesn’t Have to Be Costly
Adding solar panels is a significant investment in your home that you’ll want to protect. But securing adequate homeowners insurance coverage for your new array doesn’t have to be an expensive endeavor. With a reputable insurer and the right policy adjustments, you can rest easy knowing your solar panels are covered without breaking the bank on premiums. Being an informed and proactive policyholder goes a long way when it comes to minimizing insurance costs in general.
Do I need insurance coverage if I don’t own the solar panels?
If you lease your solar panels, you might not have to worry about insurance because the leasing company might take care of it. But some rental companies might make you insure them, either with your own home insurance or a separate policy that the rental company offers. No matter if you buy or rent the panels, you should always let your insurance company know that you have solar panels on your home. Keep in mind that if you rent your panels and insure them yourself, your insurance company may not pay as much for damage caused by wind and hail because they don’t belong to you.
How does homeowners insurance cover solar panels?
If you have solar panels on your roof, your homeowner’s insurance may pay to fix or replace them if they get damaged by a covered peril. Some insurers may not cover wind or hail damage to roof-mounted solar panels.
Yes, the “other structures” coverage on your policy might cover panels that are on top of a detached structure like a shed. But you should check with your insurance company to be sure. Ground mounted solar panels may be covered under your other structures coverage as well. You may also be able to add coverage for solar panels that are not attached to your home as a rider or endorsement to your homeowner’s insurance.
Does My Home Insurance Cover Solar Panels?
Do solar panels affect homeowners insurance?
Solar panels probably won’t directly affect homeowners insurance premiums. But homeowners may want to rethink their policy limits to ensure they can afford to replace their solar panels in the event of a loss. Here’s how to ensure this costly investment is fully protected.
Does insurance cover rooftop solar?
While rooftop solar is typically covered in a standard policy, your insurer may or may not cover other types of installations, such as ground-mounted solar panels and solar panel carports. Whether or not these separate systems are covered depends on your insurer’s policy.
How much does insurance cover a solar panel system?
Your insurance policy’s coverage limit is the maximum amount it will pay for a covered loss. In 2021, the cost of an average 6-kilowatt solar panel system was $16,860 before tax incentives and rebates; many homeowners will install systems sized at 10 kW or greater, meaning that solar is an investment worth tens of thousands of dollars.
Should you add solar panels to your home insurance?
They may also want to increase their homeowners policy limit. Adding solar panels increases the value of the home as well as the cost to rebuild if the house is destroyed by a fire or storm. If homeowners don’t want to be responsible for paying the difference on their own, they should talk to their insurer about adding additional coverage.