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Many homeowners are interested in installing solar panels on their homes to reduce their energy costs and carbon footprint. However, before making this investment, it’s essential to understand if your home insurance policy covers solar panels and what damages are included or excluded.
Investing in a solar system can be a costly endeavor, and while this investment comes with many benefits in exchange, it’s important to make sure that your solar panels are protected in the event of damage.
In this article, we’ll delve into home insurance when it comes to solar panels and help you better understand what to expect in terms of coverage so you can make an informed decision.
Is Solar Panel Coverage Included in Homeowner’s Insurance Policies?
Most homeowner’s insurance policies cover solar panels if they’re permanently mounted on your roof. This coverage is part of your coverage for your home’s “dwelling.”
If your panels aren’t on the roof and are instead attached to the ground or another structure, such as a carport, solar panels are often included in homeowner’s insurance policies as coverage for “other structures.”
There are a few caveats, though. If your solar panels are old and your insurance agency can no longer cover them, you may be required to upgrade the model to receive coverage for your solar panels.
If your home insurance company doesn’t cover your detached solar panels, you may need to manually add coverage as part of a policy rider or endorsement.
Not every insurance policy is the same. It’s always a good idea to double-check what your specific insurance policy covers so you understand what to expect in your situation.
Which Kinds of Damages Are Covered?
Not every form of solar panel damage will be covered by your unique homeowner’s insurance policy. While coverage can vary depending on the specific policy and insurance provider, some damages typically covered by homeowners insurance include:
- Lightning damage
- Smoke and fire damage (includes wildfires)
- Windstorms and hail
- Damage by aircraft or vehicle
Note that not every insurance provider will include coverage for wind or hail damage for roof-mounted solar panels. Check with your insurance company to determine the specifics of what they will and won’t cover for your solar panels and in general.
Does Homeowner’s Insurance Cover Roof Leaks With Solar Panels?
Whether homeowner’s insurance covers roof leaks with solar panels depends on the policy. It’s important to consult with your home insurance provider ahead of taking out the policy to determine if your home insurance covers roof leaks with solar panels specifically. All insurance providers are different, and there’s no blanket rule or policy to definitively say one way or another.
Damages Often Not Included in Home Insurance Coverage
While it varies between policies, your homeowner’s insurance policy likely protects many sources of damage to your solar panels. However, there are some cases where you are likely not covered, and this includes:
- Normal wear and tear or lack of maintenance
You’ll need to check your individual policy to understand what’s excluded and how it differs for roof-mounted panels covered under your “dwelling” coverage and panels that are considered “other structures.”
There may be additional exclusions depending on where you live or who your insurance provider is. It’s a good idea to familiarize yourself with what your policy covers, such as if wind or hurricane damage is covered.
Can Installing Solar Panels Affect Home Insurance Premiums?
Once you install solar panels on your roof, the value of your home will increase, and, likely, it will also increase your home insurance premiums.
You’ll likely need to contact your insurance provider and have them increase your coverage limits to include your newly added solar panels. Since they’re a significant investment, replacing them would be a considerable cost that must be factored into your premium. This point is when most homeowners might notice an increase in their monthly payments.
Identifying the Right Time to Modify Coverage Limits
Your coverage limit or claim limit is the amount of damage you can claim as a loss that your insurance policy will cover. For the sake of simplicity, we’ll be talking about roof-mounted solar panels here.
There may be exceptions or different coverage structures for panels separated from the house on another structure, such as a carport or storage shed. In these cases, there’s often a claim limit of 10% of the value of the dwelling coverage limit.
Back to the roof-mounted solar panels. Some policies may not feature a claim limit, meaning you’d be allowed to claim whatever size loss is incurred in the case of damage to your solar panels as long as it’s covered. That’s a plus, but you also want to ensure that your policy can cover any repairs or replacements to your home, including your solar panel system.
That being said, it’s always a good idea to modify your coverage limits after installing a new solar panel system on your roof. You can check to see if your current policy coverage limits are large enough to include potential panel damages and increase if it isn’t, giving you peace of mind.
Remember, not all policies are the same, so it’s essential to consult with your insurance company so you understand how it works in regard to your solar panels.
Deciding if a Separate Policy Is Necessary
Most of the time, you won’t need a separate insurance plan to include rooftop solar panels in your plan. As stated previously, you may need to increase your coverage amount to include the cost of the system, which may then increase your premium.
However, some solar power systems, such as a ground-mounted system or one added on top of a carport or shed, may not be covered by your standard policy. If it’s large and valuable enough, it may be worth it to add a separate policy to ensure proper coverage.
A separate policy is one option. Another option is adding a rider to your current policy that covers your solar panel array separately.
Every policy and circumstance will be different, so what’s best in your case will vary based on your unique situation and your insurance company. Calling your insurance provider is the best way to discuss your options and determine the best route to cover your solar power system.
There are so many benefits of going solar, including a lower carbon footprint, reduced electricity costs, and so much more – but it’s essential to protect your investment once you’ve installed a solar power system in your home.
Homeowners’ insurance policies generally cover solar panels in some circumstances. However, it’s essential to review your policy to understand what is and isn’t covered and potentially modify your coverage limits after installing solar panels to ensure you’re adequately protected.
In some cases, a separate insurance policy or rider may be necessary to fully protect your investment in solar. Give your insurance agent a call if you’re not sure how to proceed after installing solar on your home. They’ll be the best person to discuss your coverage options with.
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