Essentials Of Solar Insurance

Solar energy is renewable, sustainable, and plentiful. As solar technology becomes cheaper, more Americans are opting for this green alternative. Currently, there are over 3.6 million solar installations nationwide. 

However, like any valuable investment, solar panels require protection. Storms and severe weather can cause damage, but solar insurance coverage can help save you from hefty repair expenses.

This article will walk you through everything you need to know about solar panel insurance, from its coverage to how much it costs. 

Key Takeaways

• Most homeowners insurance policies include coverage for solar panels. However, you may need a separate policy based on your system type.
• Solar panel insurance helps protect against physical damage, theft, vandalism, breakdowns or malfunctions, and business interruptions. 
• The cost of insurance for solar panels varies but is generally affordable compared to the investment in solar panels.

What Is Solar Panel Insurance Coverage?

Solar panel insurance is a type of coverage specifically designed to protect solar panels installed on your property. 

This type of insurance helps cover the costs of repairing or replacing your solar panels if they are damaged or destroyed by covered perils, such as storms, fire, vandalism, or theft. 

Whether residential or commercial solar panel insurance, it helps ensure that your investment in solar energy remains protected, and you can continue to benefit from renewable energy without worrying about unexpected expenses.

How Does Solar Panel Coverage Work?

Solar insurance provides homeowners and real-estate investors with financial protection in case their solar panels are damaged or lost.

When you buy this insurance, you pay a premium for full coverage. In exchange, the insurance company agrees to cover the costs of repairing or replacing your solar panels if they're damaged by a covered event.

Listed below are a few benefits you can accrue with solar panel insurance:

• Peace of Mind: Knowing your investment is protected allows you to enjoy the benefits of solar energy without worrying about potential losses.
• Financial Security: Insurance can cover the high costs of repairing or replacing solar panels, which can be significant.
• Comprehensive Coverage: Policies often include protection against a wide range of risks, including natural disasters, theft, and accidental damage.

What Does Solar Panels Insurance Cover?

When it comes to solar panel insurance, it's crucial to understand the various types of coverage available. 

Typically, solar insurance includes:

Equipment Coverage

Equipment coverage is a key part of homeowners insurance solar panels. It protects homeowners from damage to their solar panels, inverters, and other components. 

While solar panels are built to handle various weather conditions, they can still be damaged. If there is theft, a natural disaster, or a system malfunction, equipment coverage helps homeowners recover costs or get replacements quickly. 

For example, if a storm damages solar panels, this coverage pays for repairs or replacements, giving homeowners much-needed peace of mind.

Liability Coverage

Solar Panel Insurance may also include liability coverage. Though solar panels are generally safe, accidents can happen. 

This coverage helps protect homeowners if their solar panels cause property damage or injury to others. 

For instance, liability coverage covers the repair costs if your solar panels fall and damage a neighbor's property. This protects homeowners from legal and financial risks.

Business Interruption Coverage

If your solar power system has technical issues or is damaged, it can stop electricity generation, which can be a problem for homeowners who rely on solar power for business. 

Business interruption coverage compensates for income losses during repair or downtime. 

For instance, if a homeowner's business depends on solar power and the system malfunctions, this coverage pays for the lost income during repairs. 

It helps homeowners meet their financial obligations even when their solar system is temporarily out of service.

Does Homeowners Insurance Cover Solar Panels?

You might be wondering, 'Are solar panels covered by home insurance?'

Many homeowners insurance policies include coverage for solar panels, so you may not need separate solar panel insurance. 

Solar energy systems – including rooftop panels or tiles – are typically considered permanent parts of your property, like a patio or a security system. However, some policies may not cover damage to these attachments if specific threats, such as wind, cause it.

To ensure your solar panels are well-protected, it's important to carefully review your solar panels and home insurance policy and communicate with your insurance company. This will help ensure your solar panels are fully covered against potential damage or loss.

Still confused? If so, here are a few points to consider:

• Attachment: If your panels are attached to your roof, they are often considered part of the dwelling.
• Ground-Mounted Systems: These may require additional coverage or a separate policy.
• Policy Limits: Ensure that your policy limits are sufficient to cover the full value of your solar panels.

Should I Raise My Coverage Limits If I Get Solar Panels?

One crucial thing about home insurance solar panels is that there may be no claim limit. 

A claim limit is the maximum amount your insurance will pay for a loss. This differs from coverage on separate structures such as a gazebo or storage shed, which may have a limit of 10% of the dwelling's coverage.

No claim limit is a big benefit for homeowners with solar panels and insurance. However, you should check the policy to ensure it covers enough to repair or replace your home and solar panels. 

Also, know any deductible you need to pay before coverage activates.

If your coverage limit isn't sufficient, you may want to raise your insurance rider or dwelling coverage limits. 

Understand what your solar panel homeowners insurance covers before you add an endorsement or increase premiums to get the best value for your money.

When Do I Need Separate Insurance Policy For Solar Panels?

Standard homeowners policies cover most rooftop solar power systems, so your insurance plan usually won't change. However, not every solar panel system or policy is the same. 

Some systems, like ground-mounted panels or solar panel carports, may need a separate or add-on policy. Solar energy insurance coverage for these systems varies based on your policy. 

If the system is large enough, you may require its own coverage policy or an add-on rider. While your home insurance premium won't change, your monthly costs might.

Solar electric panels that aren't permanently fixed to your home are more prone to damage. If you live in a high-risk area – such as where hurricanes or tornadoes are common – buying separate insurance for solar systems can be a smart idea and may be required by your provider.

In addition to that, here are a few other areas where you may need separate insurance for solar panels:

• You want additional coverage for specific risks not covered by your homeowners policy, such as a mechanical or electrical breakdown.
• You lease the solar panels, and the leasing company requires specific insurance.

How Much Does Solar Panel Insurance Cost?

The annual cost of a separate endorsement for solar panels to homeowners insurance falls between $100 to $1,000. 

However, the cost varies based on your insurer, coverage options, solar system size, property location, and coverage limits.

Some insurance providers offer discounts for homes with solar panels. Homeowners may also qualify for tax credits or rebates for their solar panel installation, helping to offset solar system insurance costs.

Since solar panels can easily cost you anywhere from $8,500 to $30,500, the insurance is a small investment for the protection and peace of mind it provides.

Do I Need Insurance Coverage If I Lease the Solar Panels?

Leased solar panels are owned by a third party – typically the solar company. 

If you lease panels or use a power purchase agreement, you don't need to worry about higher insurance premiums or extra homeowner insurance. The responsibility for insuring solar panels typically falls on the leasing company because they own the panels. 

However, reviewing your lease agreement to understand the specifics is important. This is crucial because some leasing agreements may require you to have homeowners insurance that covers the leased panels.

Nevertheless, leasing solar panels is a good option if you want to go solar without paying upfront. Many companies let you lease panels with little or no upfront cost.

Still Have Questions?

Curious to learn more about solar panel installation insurance? Here are some frequently asked questions:

How Do You Insure Solar Panels?

To insure solar panels, you can either add an endorsement to your existing homeowners insurance policy or purchase a separate policy specifically for your solar panels. Contact your insurance provider to discuss the best option based on your needs and the value of your solar panel system.

Do Solar Panels Increase Home Insurance?

Adding solar panels to your home may increase your homeowners insurance premium slightly, but it can also add value to your home. The premium increase is generally due to the added value and potential risks associated with the panels.

Are Solar Panels Worth Having?

Yes, solar panels are worth having. They can significantly reduce your electricity bills and are an eco-friendly energy source. Additionally, they can increase the value of your home and provide long-term financial benefits.

Do I Need to Insure My Solar Panels?

Yes, insuring solar panels is highly recommended to protect your investment. Without solar insurance, you would have to bear the full cost of repairs or replacement in case of damage or loss.

How Do I Know If My Solar Panels Are Insured?

To find out if your solar panels are insured, review your homeowners insurance policy or contact your insurance provider. They can confirm whether your current policy includes coverage for solar panels or if you need to add an endorsement or purchase separate insurance.