Are Solar Panels Covered By Homeowners Insurance?

Find out how to protect your energy-saving investment with a homeowners insurance policy for your solar panel system.

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Ross Martin

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Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Does homeowners insurance cover solar panels?

When it comes to adding solar panels — otherwise known as photovoltaic (PV) systems — to your roof, most insurance companies see them as part of the structure of your home. That's good news because it means a regular homeowners policy usually has you covered, and you won't need to get special insurance just for your solar panels. But, it's important to do a little homework to make sure you've got the right level of protection. Below, we’ll cover the process of getting the right insurance coverage for your solar panel system and address common concerns about this investment in renewable energy.

How much coverage should I have if my home has solar panels?

How much homeowners coverage you need isn't a universal number — but because your home is one of the biggest investments you'll make, it's good to have as much coverage as you can reasonably afford.

Your coverage is more than simply the rebuilding cost of the house itself. The different areas of your policy include the following:

  • Dwelling
  • Other structures
  • Personal property
  • Loss of use
  • Personal liability
  • Medical payments

If you plan to boost your home's value with some big improvements, like installing solar panels, remember this will likely increase the cost of replacing your home. This means you'll want to evaluate your current coverage limits and consider increasing that number. If your home is severely damaged, you’ll want to have a limit high enough to cover the cost of your dwelling as well as a new PV system. Because solar panel installation is not cheap, you may need to factor the replacement cost of this system into your coverage limit. Raising your coverage limits is a good idea and can be done for a relatively low premium increase.

solar panel cost

How much do solar panels cost?

According to the Solar Energy Industries Association (SEIA), the average cost for a residential PV system has dropped by about 47% over the last ten years, making it more popular and attainable for homeowners. The average residential home can have a solar energy system installed for around $25,000 (compared to $40,000 back in 2010).[1] Even with these drastic cost reductions, a solar panel system is a major investment and will affect your insurance premium.

Do I need a separate policy or endorsement for solar panels?

There are instances in which you may need an add-on to your coverage or, in some cases, an altogether separate policy for your solar panels. For instance, if your solar energy system is mounted in your yard rather than on your rooftop, you may require additional coverage, as it is not a part of your actual dwelling. It’s a similar story for a solar panel carport, an example of a freestanding structure that may require a rider or separate policy. We suggest you consult your insurance agent or company to decide on the best course of action in these circumstances.


Leased vs. owned solar panels

For those interested in installing a solar panel system but who may not be in the financial position to do so, another option exists. Many companies offer leasing options that allow users to install a solar power system at little or no up-front cost. The important distinction is that you do not own the system. In most cases, this means that you are not required to insure a leased solar energy system or worry about upkeep. That responsibility lies with the leasing company that services the system. However, while you can still benefit from lower energy costs by leasing, you will not see the same savings as you might owning the solar power system outright.

Inform your insurer about major changes

We purchase insurance to have peace of mind that damage will be financially covered if something unexpected happens to our home. To avoid unpleasant surprises, like denial of a claim or insufficient coverage, it's important to communicate with your insurance company when you make major changes or remodel your home. They can fill you in on all the details about how these changes or additions fit into your current policy. They'll also let you know if there are any specific perils, like storm damage, that might not be covered. Getting the scoop directly from them can help you feel more secure about your decision and ensure you're not missing any key information.

Here are some examples of updates to a home that could require a change to your coverage:

  • Installing a pool
  • Adding square footage
  • Replacing key components (like a roof)
  • Finishing a basement
  • Building an additional structure

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Roof leaks are generally covered by your homeowners insurance. However, if your solar panels were installed incorrectly, which caused the roof to leak, then the company that installed the panels should be responsible for covering this. We recommend vetting your solar company thoroughly and discussing protective measures with them before installation.

If solar panels are rooftop-mounted, the company you have your homeowners coverage with will likely cover them as part of the structure of your home (this includes most well-known home insurance companies). However, it's important to communicate with your insurance company to check for exclusions or perils that may not be covered. Solar panels generally come with a warranty, and qualified solar panel installers will likely warranty their work.

Like any exposed part of your home, unexpected damage from things like wind, hail, or flying debris is a risk with solar panels. However, solar panels are built to withstand the elements. It's a good idea to research renewable energy systems when you're considering the investment and educate yourself on the risks and rewards alike.

When you increase your coverage limits, your premium will likely increase as well. If you're going to increase the coverage amount due to the added value of the solar panels, you can expect your rates to increase slightly. However, the cost of carrying more insurance coverage is usually minimal compared to the added amount of protection you'll have in the event of a claim.

Articles sourced

  1. SEIA: Research Data

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