As someone interested in installing solar panels on your home, you're likely keen on protecting your new investment. Though solar panels are some of the most durable equipment you can install on your property, it's still smart to have a plan in the event of damage. That's what brings us to the key question every homeowner should ask: Will your home insurance cover your solar energy system?
Insurance for Solar Panels
The good news is that most homeowners insurance plans cover solar panels under the dwelling portion of the policy as long as they are attached to your home. That covers the majority of homeowners, as rooftop solar energy systems are the most common option for residential buildings. If your solar panels are not attached to the home — in the case of solar pergolas or ground-mounted systems, for example — they usually require an add-on to the policy. If the system is large enough, it might even warrant its own separate policy.
Coverage for Solar Energy Systems
It's important to note that your homeowners insurance policy is likely not a catch-all for any issues that arise. Damage to your panels is only eligible for reimbursement if the cause is one of the policy's covered perils. Commonly covered issues include damage from a fire or hailstorm, but earthquake-related damage usually requires a specialized and separate policy. It's also important to note that wear and tear is rarely covered, however, this shouldn't be an issue for many years with a newer system using high-quality components.
Leased Solar Panels
More homeowners are discovering the option of leasing solar panels, allowing them to get the benefits of solar energy generation without putting down a significant amount of money upfront. In most cases, you won't need to add these solar panels onto your home insurance or take out a new policy because you don't own the panels, but you should always clarify what insurance is or isn't included in your lease.
Every Insurer is Different
It's essential to communicate with your insurer about any solar panels installed on your home or property since coverage will vary by company and even by policy. Ask your agent what types of damage to your solar panels will be covered and how the new energy system will affect the cost of your policy. Since your policy rate is typically calculated according to your home's value, the solar panels may result in a rate bump. Your agent can also help you determine whether you need to adjust your policy to provide optimum coverage for this critical investment.
