Do Homeowners Insurance Policies Include Coverage for Solar Panels?

The popularity of installing solar panels is growing exponentially. Cost savings, many benefits, a significant reduction in utility costs, the ability to resell surplus energy, and good solar panel insurance coverage are the primary reasons why buying a system is profitable.

But the total cost of its acquisition and installation remains high – $ 15,000-25,000. Only some people are ready to say goodbye to such an amount immediately, especially considering that some parts of the panels may fail ahead of time.

Although the warranty period of systems is 20-25 years, several factors, such as a hurricane or storm, can lead to the need to replace components. Therefore, additional costs during the entire life cycle are possible, and they can significantly hit the wallet.

Solving this problem will help insurance on solar panels. But, here, more questions arise: do solar panels increase home insurance, how exactly should it be done, and when does home insurance cover solar panels, how much does it cost to insure solar panels, and is it profitable? Let’s examine in more detail each of these questions.

Are Solar Panels Covered by Home Insurance?

Yes, but only if it is written in the solar panels home insurance policy. The main types of hazards that caused damage to the system, covered in this case:

• wind;
• fire;
• hail;
• lightning;
• ice;
• snowfall;
• fallen tree.

If damage to the panels or their components occurs due to the above reasons, the company will fully or partially cover the cost of repairs or the purchase of new parts up to the whole system. But before receiving compensation, you must pay the deductible under the policy in cash.

But to the question of “are solar panels covered under homeowners insurance in case of earthquakes, damage by pests (mice, rats, insects, etc.), or floods?” – the answer will be negative. Several insurance companies can please you and cover the damage resulting from such dangers. But everything will depend on the terms of the home insurance and solar panels policy, which is better to read carefully before signing.

Be sure to evaluate the claims limit set in your case. That’s the maximum amount of damage that the policy can cover. There are two main types of claim limit payments for homeowners insurance and solar panels:

1. Suppose the panel is on the roof. The payment will be made for the primary and permanent housing coverage in full because of the exactly attached panel to your home. It will also ensure other installations adjacent to the house – a security system, generators, etc.
2. Suppose the panel is in the local area. In this case, payments are made to cover other structures and are only 10% of the amount needed to recover from damage. Companies can often extend their coverage, agreeing upon any added limits before signing the contract. Unfortunately, regular homeowners’ insurance policies typically exclude solar panel systems in areas prone to wind damage and other cataclysms. So double-checking and asking your solar panels insurance provider is in order.

Home insurance covers solar panels, so most often, there is no need to make a separate policy. But to avoid relying on hope, carefully read the solar panel insurance policy.

Do Solar Panels Raise Home Insurance Rates?

The solar system itself does not increase the rate directly. But do solar panels increase homeowners insurance in other ways? Yes, if you want to receive a payout in case of system damage, you must increase the coverage limit. And this will already lead to an increase in the solar panel home insurance tariff. That’s because the coverage limit must equal the restoration cost in case of such a need.

It’s enough to renew your home insurance immediately after installing the solar system and after consulting with your insurance agent to eliminate the problem of increasing insurance while having solar panels during exploitation.

Don’t be afraid that solar panels will increase your home insurance. After all, if the system undergoes damages, and the insurance cannot pay you because you did not take care of it, repair and replacement of parts will cost you much more which is the main disadvantage.

Purchasing an Additional Solar Panel Insurance Policy

There are two situations: adding solar panels to home insurance is impossible, and an additional policy is required. In many states, this is installing a solar system in the local area, which relates to a higher risk of injury.

The second option for the need for separate homeowners insurance for solar panels is the conditions of a particular insurance company. Each has its own rules and has every right to do so. Therefore, be sure to clarify this issue in the contract.

Separate solar panel insurance registration takes little time and financial cost. But you can be completely safe in case of accidents.

Do You Need To Inform Your Insurance Company About Your Solar Panels?

Yes, this is a required step. Your insurance agent will answer the main question, do solar panels affect home insurance in your case? In addition, notification of any major changes to your home and yard may be mandatory, and you can read about it in the insurance policy.

The insurance agent can recalculate the amount of solar panel hail damage insurance and other downside risks or offer more optimal coverage options regarding price and conditions.

Should You Expand Your Coverage After Putting in Solar Panels?

Solar panel insurance, in most cases, depends entirely on the insurance company you choose. It’s best to read the conditions regarding solar panels and decide on your own or after talking with an insurance agent. For example:

• If the existing coverage under the contract does not allow you to receive the required amount of payments in case of accidents, it is worth increasing its coverage with solar panels;
• When under the contract, home insurance for solar panels is included only for certain situations; it may be worth reviewing the contract without thinking about if solar panels increase home insurance;
• If along with the solar system, you immediately install many additional installations (inverter, generator, etc.) on the territory of the house, this also indicates the need to expand solar panels’ insurance.

In addition, some insurance companies give too little compensation when the solar system is installed in the local area. That is also a reason to review solar insurance.

How Solar Panel Leasing Affects Your Home Insurance

In the USA, solar panels are increasingly being rented. That is a convenient way to get most of the perks of the solar system without having to shell out a large amount of money at once. But in this case, solar panels and homeowners insurance have nothing in common. Since the system doesn’t belong to the homeowner, they do not need insurance.

But if you worry about the possible risks of damage to the panels, contact the solar company from which you rented the panels. As the system’s owner, they can have their insurance for the panel installed in your home, and that’s entirely the area of responsibility of the renting company.

If hail, snow, or lightning damage the installation, it will depend only on them who will carry out the repair expenses. They cannot shift responsibility to the homeowner, but clarifying this in the contract is better. Therefore, the money will have to be paid from the company’s budget or solar panels insurance coverage, which they issued themselves.

Sometimes solar companies rent out the system and require the homeowners to take out solar system insurance on their own. That is, they make you bear responsibility for all possible accidents. Therefore, consult with various representatives of solar companies and choose the best supplier for yourself.

Cost of Solar Panel Insurance

How much does home insurance go up with solar panels? The cost of home insurance with solar panels will depend on the size of the system and the cases from which you plan to insure it, and it varies depending on the coverage and size of the system. As a rule, insurance companies charge about 1-2% of the system’s total cost annually. But, companies often offer discounts, which can lower the price.

How Much Does It Cost to Remove and Reinstall Solar Panels?

HomeAdvisor says average removal prices of solar panels range from $400 to $600. The company’s analysts state that shipping costs will be $200. To uninstall mounting hardware takes another $600. Roof work is estimated at $800.

If you want to reinstall solar panels, it will cost you from $1500 to $6000, according to EnergySage.

The main reasons why people remove solar panels are:

• to buy brand-new solar panels
• move existing solar panels to another home
• to repair, replace, or enhance roofing systems
• release outdated and broken solar systems
• to replace solar panels

Usually, it takes one day to remove solar panels and 2-3 days to reinstall solar cells and rack after the roof is repaired.

Roof Damage as a Result of Solar System Installation

When applying for solar panel installation services from unscrupulous contractors, there is a risk that they will damage the roof of your house during the work. Does homeowners insurance cover solar panels in this case?

Most often not, which will require you to pay for repairs or purchase new systems out of your pocket. It is essential to be meticulous when choosing a team of installers and search for them through live reviews, traditional channels, and advice from friends and colleagues.

If the installation is to responsible for its damage, you can contact the insurance provider to find out if home warranties cover solar panels.

Does Installing Solar Panels Void Roof Warranty?

Installing solar panels does not void the roof warranty if you follow the instructions. But some situations derail roof warranty. Among them, we can highlight the following:

• The racking system for the solar panels isn’t appropriately installed
• Any add-ons to your roof
• Poor installation job that damages your roof

If something of that kind happens, apply for solar installers. In any case, consult with a roofing company before installing solar panels not to void your roof warranty.

There are three main types of warranties for solar panels: a product warranty, a workmanship warranty, and a power or performance warranty.

The product warranty covers solar panel materials (i.e., inverters for 10-12 years, panels – a bit longer).

The power warranty covers the energy production of PV elements. Typically manufacturers guarantee ten years and 90% of the energy output.

The craft guarantees coverage for improper installation by workers.

What Is the Solar Tax Credit?

ITC is a tax credit for solar energy projects. Its adoption in 2006 acted as a catalyst for the growth of the solar industry in the US. Also, it prompted customers to switch to solar energy, which is clean and environmentally good.

It currently equates to a federal tax credit of 30%. In other words, for users of various income levels, this proportion lowers the overall cost of the solar energy system. ITC includes residential and commercial installations, including photovoltaic (PV) systems, solar water heaters, and solar pool heaters. This is similar to home insurance solar panels.

Do Solar Panels Work During the Winter?

Naturally, despite the challenges posed by snow, wind, and other winter features, the solar system will function. It will still produce energy while buried under the snow.

It is best to consider in advance whether insurance covers solar panels if you reside in a northern state. They will function, but the chance of harm increasing exponentially. Additionally, keep in mind that less energy will be produced than in the summer.

The system helps the snow melt more quickly and functions even better in colder climates. But to feel safe, it is better to increase the coverage limit on the solar panel insurance policy when there are frequent and heavy snowfalls.

Is Solar Energy the Right Choice for Your Home?

Whether solar panels increase your home insurance or not, purchasing a solar panel is the best solution for your home. Let’s take a closer look at the principal purchase benefits:

• $20,000 savings over 20 years of battery life;
• minimizing the carbon footprint from electricity consumption;
• taking an integral part in the fight against global warming;
• the ability to apply for ITC and receive additional benefits in your state;
• reducing dependence on other energy sources;
• the ability to sell excess energy to utilities (in some states);
• increase in the cost of housing, in case you want to sell it.

Therefore, it’s not worth it if you’re still deciding whether solar panels affect your house insurance. Yes, if the roof of your house is in very poor condition, but you still decide to install the system, nothing good will come of it. In this case, insurance companies are unlikely to help you, and when everything collapses, no solar panel installation insurance will cover your costs.

In other words, before buying, be sure to study the preparation of the house and the rules for issuing solar panels hail damage insurance and other phenomena.

Does Homeowners Insurance Cover Acts of God?

Natural disasters like flooding, earthquakes, fires, hurricanes, and similar are called acts of God. As mentioned above, homeowners’ insurance doesn’t cover damages from natural disasters like flooding, earthquakes, or pests (mice, insects, squirrels). Your insurance company won’t offset harm from these incidents.

The list of hazards may depend on your insurer. The act of God insurance deductible is higher than the usual deductible. Remember that when making a decision on house insurance and solar panels insurance.

Apply to your insurance agent to know what the company covers and does not.

Insurance Coverage for Hurricane Areas

You need to buy separate insurance coverage in areas with frequent wind storms and hurricanes. For instance, insurers don’t cover damages caused by wind in certain states because of the high likelihood of wind storms. 19 states require you to buy additional coverage for such acts of god as wind and hurricanes: 

• Alabama
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Louisiana
• Maine
• Maryland
• Massachusetts
• Mississippi
• New Jersey
• New York
• North Carolina
• Pennsylvania
• Rhode Island
• South Carolina
• Texas
• Virginia

Policies in these states are called Wind Insurance or Windstorm, Wind, Storm, or Hurricane Policy. 

Wind insurance works as a deductible. If damage from a wind storm occurs, you must pay a specific percentage of your home costs (including the solar panel system’s cost) from your pocket. This range may be from 1% to 5% percent depending on the state and the probability of such natural disasters as storms and hurricanes. 

Windstorm insurance coverage depends on your deductibles, location, and potential costs to rehaul your home. 

If you reside in the areas listed above and own a solar panel system, consider buying extra Wind Insurance. But insurance companies can’t add or alter insurance if a hurricane has begun. So it is better to obtain this coverage beforehand.

Pros and Cons of Earthquake Insurance

The good news is that solar panels are resistant to earthquakes. But you may need earthquake insurance if you live in San Francisco or nearby.

This type of insurance is separate from home insurance and solar panel insurance. It’s the main downside of this policy. If the fire follows after an earthquake, a home insurance policy covers the fire but will not cover damages from the quake itself.

Are Solar Panels Covered for Hail Damage?

Your solar panels withstand slight frozen rain. But in some states with severe hailstorms, solar panels damaged by hail don’t work correctly.  Warranties may not include dents from hail. Solar insurance policy may not cover hail damage to solar panels. The abovementioned 19 states require separate insurance.

Ask your agent if you qualify for hail damage solar panels protection via home insurance or a separate policy, especially if you live in areas with frequent hailstorms.

Do Off-Grid Homes Require Special Insurance?

You may ask yourself: “Do off-grid home require special insurance?” The answer is: “The independent off-grid homes insurance policy doesn’t exist.” In this case, you can carry standard home insurance. 

You may live in an off-grid house all the time or rest there occasionally. In this situation, you may require add-on coverage to your homeowner’s policy.

Insurers consider possible threats:

• Do-it-yourself (DIY) installation: If you installed the electricity in a home without a vetted electrician, many insurance companies wouldn’t insure such dwellings.
• Location: Owning a house in areas with a high likelihood of extreme weather conditions requires more costs for a home insurance policy or doesn’t allow you to insure this house.
• Water sources: Free access to water qualifies you for a home insurance policy. 
• Fire risks: If you frequently use coal and wood in your home, prepare to pay more for this coverage.

Considering the risks mentioned above, depending on your situation, you may need a specific insurer’s endorsement.

Insuring Solar Panels on Commercial Buildings

Commercial property insurance requires considering particular threats. If a company owns solar panels, it is responsible for their insurance. If the company leases them, it doesn’t need to insure them.

Other risks include:

• Environmental threats: Buildings located in areas with severe weather conditions create significant risks for companies that install solar panels. 
• Regulation changes: Although the latest tendencies are environmentally friendly and endorse green energy, sudden changes in law regulation require the company who installed solar panels to review their solar panels’ insurance, maintenance costs, taxes, and other factors, which may impact green energy output. 
• Low energy output: Climate changes can increase or decrease sunlight in specific areas. So it would be best to have solid and reliable forecasts for your company depending on the weather conditions, which is not always possible. 
• Liability risks: Solar panel systems exposed to other individuals (third parties, customers) can be a source of potential damage to the surface because of a fall, breakdown, or any further damage. So it would be best if you had liability insurance for solar panels. 
• Energy storage risks: This risk largely depends on how correctly the management calculates solar energy production in your area, the storage capacity, and the company’s energy consumption.
• Damages and theft: Unskillful or malicious workers can damage or steal materials, parts of solar panels, or even some solar panels themselves. So the company needs to resolve this security issue. With modern security systems, it will be an easy task, but keep this threat in mind. 

The company’s management must bear all those factors and make decisions accordingly.

Final Word

Solar panel insurance takes specific steps. Do proper research to confidently answer the question: “Does installing solar panels affect your house insurance?” Ask your insurance agent if you need to increase your policy dwelling coverage limit. 

Whether you require extra solar panel coverage or are already covered by current home insurance, the price you pay should be reasonable.

Maintain a good credit score to decrease your insurance premiums. Factors that influence credit-based insurance scores are similar in most states. Although lenders use different methodologies to estimate your credit score, the rule of thumb that keeps your credit score on a good level doesn’t change:

• Maintain your debt (if you have it) at a minimal level
• Pay your bills on time
• Seek ways to reduce your solar panel insurance premium
• Utilize insurance companies’ discounts
• Avoid opening new credit lines
• Apply for your insurance agent to optimize your budget for home insurance

You must also consult with your roofing company and solar panel installers to pass the installation process smoothly.

Frequently Asked Questions