The Fullest Online Guide About Solar Panel Insurance

May 13, 2024

A solar panel for home is a fantastic way to generate clean energy and slash electricity bills. However, since panels are significant investments, you naturally want to figure out how to protect yourself from unexpected expenses.

We’ll deeply delve into solar panel insurance, describing the differences between general and advanced homeowner coverages. You’ll learn when basic coverage suffices and when additional protection is warranted. By the end, you’ll be empowered to navigate the solar warranties confidently and determine if the solar panel for home fits your current contract.

Introduction to The Solar Panel for Home Usage and Its Cost

A couple of workers are installing a solar panel system on the house.

Solar systems use the photovoltaic effect to produce eco-friendly electricity. If you want to power household appliances, buy an inverter that converts DC to AC. Consider purchasing batteries to store the excess energy from your solar panel for home use.

Solar energy is an abundant power source that reduces your reliance on fossil fuels. These panels can last up to 25 years or more with minimal maintenance. Over time, they help you save money on your electricity bills. Tax credits and other government incentives can significantly lower the upfront price of a solar panel for home usage.

However, all solar solutions have a relatively high upfront cost, usually from $10,000 to $30,000. Initial installation can be expensive for some households, so many new owners are considering getting solar panel insurance. This decision helps them save money in an emergency, as those systems are protected from the most common hazards.

Solar Panels For Home and Your Current House Insurance

Usually, your homeowner’s contract will cover your solar panels for common damage types. The panels are typically considered a permanent fixture on your house, similar to a patio. But it’s better to double-check the documents to ensure your solar energy insurance can cover it.

Take a closer look at those points:

  1. Covered damage: It should cover the panels for the same perils covered for your roof, such as fire, theft, wind, hail, or harm from a fallen tree.
  2. Deductible: Beware that you’re responsible for paying the deductible for a solar panel for home usage before your insurance kicks in.
  3. Increased coverage: Solar panels increase your house value, which may raise the homeowner’s insurance payments.
  4. Specific policy details: Check with your insurance agent to ensure your policy covers solar panels and to identify any exclusions that could affect your solar panel insurance.

Cases When Your General Homeowner’s Insurance Covers the Panels

Generally, your basic homeowner’s insurance will cover solar panels for sudden and accidental damage caused by covered perils. However, we recommend that you double-check your papers.

Inspect the covered perils section to ensure your solar panel insurance covers common damages. Listed events may include fire, theft, vandalism, wind, hail, or damage from a fallen tree. If those events damage your solar panel for your home, the insurance organization will cover the repair or replacement costs minus your deductible.

Generally, the solar panel insurance applies only to solar panels permanently attached to your roof since they are part of your dwelling structure. If you place panels in the backyard, they may be considered non-permanent structures. Thus, homeowner’s solar installation insurance won’t cover them.

When General Homeowner’s Insurance Won’t Cover Panel’s Damage

There are a lot of situations when you won’t get any compensation by using basic home insurance. It includes, but is not limited to, the following cases:

  1. Normal wear and tear. As with any home component, gradual degradation due to regular use would not be covered by insurance.
  2. Lack of maintenance. Your insurance claim might be denied if damage to the solar panel for home occurs due to neglected care.
  3. Manufacturer defects. Your homeowner’s insurance won’t cover the panels’ factory imperfections. Check the panel’s warranty, as it usually covers those losses.
  4. Improper installation: If damage results from faulty installation, your homeowner’s insurance might not provide coverage. We recommend you check the workmanship solar panels insurance, typically addressing such incidents.

If your situation fits one of these, you will mostly not get compensation. However, we still recommend you check the contract, as it may have slightly different conditions.

Cases When You Need Separate Insurance For Your Home Solar Panels

Close-up view of two businessmen shaking hands after signing an agreement on renewable energy.

Beware that there are a few instances where you might need separate insurance for your solar panel for home. The most common situations include the following:

  1. Non-roof-mounted panels: If you install panels on the ground, a carport, a detached garage, or any structure separate from your roof, they might be excluded from your homeowner’s insurance coverage as detached buildings. Thus, you may sign an add-on endorsement to your existing policy. Note that the solar panel insurance for home usage doesn’t cover the damage to non-roof panels.
  2. Large or complex systems: The value of huge solar panel systems might exceed the coverage limits on your homeowner’s policy. In this case, you might need a separate commercial solar insurance policy.
  3. Specific needs: You may need additional insurance if you want extra coverage for home insurance solar panels.

However, it’s always best to consult with your insurance agent to discuss your specific situation with a solar panel for home usage and ensure your panels are adequately covered.

Diving Deep into the Nitty-Gritty of Solar Panel Insurance

As you can see, your homeowner’s insurance usually covers a basic solar panel for home usage. However, the devil hides in the details:

  1. We encourage you to examine the exact wording, as some solar insurance policies may exclude specific installation types, have wind limitations, etc.
  2. Your geographic location can also influence the coverage of your solar panels for home. For instance, if you live in an area prone to hurricanes or tornadoes, your policy might have additional exclusions or limitations related to these perils.
  3. Ensure your solar system meets the local building codes. Faulty installations that don’t comply with codes might not be covered by solar panel insurance in case of damage.
  4. We also encourage you to double-check all permits for your case. Many local governments require permits for solar panel installations. You need licenses to maintain your solar panel insurance coverage if damage occurs.
  5. Some companies offer only a Panel Performance Guarantee, while others provide only a Power Production Guarantee. A performance guarantee ensures panel efficiency over time, while a production guarantee covers your system’s electricity output. You should look for companies that offer both types of insurance for solar panels.
  6. When you sign a solar panel insurance contract, consider potential liability coverage. Standard homeowners liability insurance likely covers basic scenarios where your solar panels cause damage to others’ property. However, consider additional coverage for specific concerns, such as fire originating from your panels or electrical malfunctions.

Solar Panel Insurance in Cases Where Users Don’t Own The System

In cases where you don’t own the solar panels on your roof, insuring solar panels gets more complex. However, it is still possible to protect yourself from unforeseen expenses.

Generally, your classic homeowner’s insurance covers your roof structure, regardless of whether you own the solar panels. It means that damage caused by covered perils (fire, hail, wind) to the roof would be covered by solar panel insurance.

However, we still recommend checking your lease agreement with the solar panel company. This document will clearly outline who is responsible for solar panel insurance. Typically, the leasing company insures the panels.

The agreement about your rented or leased solar panel for home usage should specify a certain level of coverage provided. It may state your responsibility for any damage caused by negligence or intentional actions. If you buy the system at the end of a PPA agreement, the insurance responsibility may shift to you. Make sure the solar panel insurance agreement clarifies this.

Depending on the insurance company, you may have the option to buy extra coverage. Discuss it with your agent. By understanding deal details about solar panel for home usage, you can avoid insurance coverage gaps. Remember, the lease agreement outlines future insurance duties.

Ask the solar panel company for a certificate of insurance verifying their coverage for the rented panels. This document is helpful for potential claims. Keep copies of your lease agreement, solar panel insurance certificates, and all communications with your insurance agent regarding the panels in an organized manner. It will be crucial if you ever need to file a claim.

How to Adjust Claim Limits In Solar Panel Insurance

Contact your insurance agent first. They’ll review your policy and assist with adjustments. Wait until your agent reviews your coverage limits, determining the maximum payout for rebuilding your home after a total loss. Later, the agent helps you evaluate the panel’s impact on your home value.

Based on the agent’s recommendations and your home’s value with solar panels, you’ll decide on a new, higher dwelling coverage limit. Increasing the dwelling limit will likely lead to a slightly higher premium while your agent details the anticipated cost difference.

Once you agree on the new limit, your agent will walk you through modifying your solar panel insurance policy. It might involve signing an endorsement document outlining the coverage limit change.

While reviewing the contract, remember that replacement cost and market value are different terms. Dwelling coverage typically reflects the replacement cost of your home, not the market value. Replacement cost considers rebuilding your home with similar materials, while market value reflects what someone might buy it for.

It’s Always Better To Double-Check While Insuring Solar Panels

A couple of workers building a residential solar panel system.

Solar technologies can provide clear and abundant energy, lowering electricity bills and increasing your home’s market value. So, many people consider them a highly profitable investment. We recommend you insure the solar panel for home usage from accidents to ensure it will pay off in the long run.

The last step is to find the perfect system for your home. Don’t navigate the process alone — contact us so we can find you solar installers who perfectly suit your needs. They’ll assess your sunlight exposure, roof suitability, and energy needs to design a custom system that maximizes your savings.

They will also help you find solar panel insurance that suits your needs. With a clear understanding of costs and potential benefits, you can make an informed decision about bringing solar power to your home. Take control of your energy use and invest in a sustainable future — get a solar quote today!

Frequently Asked Questions

Do solar panels increase home insurance?

Solar panels don’t directly cause a significant increase in homeowners insurance premiums. Usually, it’s lower than 5-10%. However, if you increase coverage limits, it will reflect in the premium.

What insurance companies cover solar panels?

General insurance companies in most states and counties offer solar panel insurance under standard homeowners’ insurance. Just ensure that the panels are roof-mounted. That way, they become considered part of your dwelling structure. Solar panel insurance is available at State Farm, Nationwide, American Family Insurance, Liberty Mutual, Chubb, and many others.

Are solar panels covered under homeowners insurance?

Yes, in most cases, standard homeowner’s insurance covers roof-mounted solar panels for basic damage, including fire, theft, vandalism, wind, hail, or damage from a fallen tree. If these events affect the solar panel for home usage, your insurance should cover the repair or replacement costs minus your deductible.

Jed Hilton
Jed Hilton

Jed Hilton, our Founder and CEO, has over a decade of experience in the solar industry. His innovative leadership and expertise in solar technologies guide our company's vision and strategy.