Do Solar Panels Affect Home Insurance Rates
Your insurance company might require an add-on or separate policy for certain types of solar panel systemsSolar is valuable, so you may want to raise your coverage limitYour insurer may or may not cover damage caused during the installation processRegardless of home insurance, use quality solar panels and a well-vetted installer
Are Solar Panels Covered By Insurance
by Jarvis Robins | Jan 18, 2022 | Electricians Blog |
When it comes to solar panels and insurance, it seems that homeowners are divided in the information they have been provided. Are solar panels included in home and contents insurance? Are they not? Will my premium increase? The questions go on.
So, are they covered? We have the answers to all your questions, and more, so keep reading if you want to know! If you have any questions regarding solar panels, give Static Electrics a call on 1300 206 004 for more information!
Solar Panel Insurance: A Guide To Home Insurance For Solar
Installing solar panels is one of the easiest ways to start saving some serious cash on your electricity bills.
But, before installing them, it is essential to find out how solar insurance works. After all, you want to be sure that both your home and your solar panel system are properly covered before the solar panels are drilled onto your roof!
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What If My Home Insurance Doesnt Cover The Solar Panels
Dont worry. If your home insurance declines to cover your solar panels, start looking for an insurance agency that does. There are tons of insurers looking to help you.
Switching your home insurance provider gives you the opportunity to save more money by going for a cheaper insurer. Most home insurance providers in the market today also offer premium discounts for homes which upgrade to solar.
This is because solar panels make your home more eco-friendly and efficient.
The Good News: Most Home Insurance Covers Solar Panels
Once a rooftop solar panel system is installed on your home, it is considered part of your home under most home insurance plans. That means that in many cases covering your solar panels under your home insurance wont create the need for a special add-on , wont change your plan, and wont increase your premiums. That being said, every insurance policy is different, which is why you should still call your insurance company to confirm that your PV panels are covered.
While your home insurance likely covers your solar panels, there are a few things to keep in mind:
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Will I Have To Pay More
Yes. You will need to contact your insurer and increase the sum you are insured for in line with the amount your solar panel system would cost to replace.
Some insurers, such as GIO and Suncorp, have policies with optional added features that will cover you for the extra money you will spend on electricity if your solar panels are damaged and not able to function correctly. This is up to a sum of $750 per quarter until your panels are replaced or repaired .
Do You Need To Tell Your Insurance About Your Solar Panels
Yes, reaching out to your insurance company about your solar panels is always recommended.
Informing your insurance company that you have solar panels will help them re-rate your policy and determine if you need additional coverage. Theyll also have the choice to offer you insurance products that will best cover your solar panel investment.
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Advice For The Listing Agent
- Make sure you understand the challenges solar panels can present in a sale and what your selling clients need to know.
- Ask questions. The listing agent should confirm with the seller if there are solar panels on the property. If there is solar equipment, the listing agent should ask if they are leased solar panels. The listing agreement should confirm this status.
- Be very careful with MLS listings. Make sure your listing doesnt imply that the solar panels are part of the sale if theyre actually leased. Errors in MLS listings can lead to lawsuits, even if theyre accidental.
Are Solar Panels A Selling Point
For most homebuyers, solar panels are indeed a selling point.
In addition to the fact that solar panel systems dont require much maintenance, they can also lower or eventually eliminate utility bills, increase home value, and allow the homeowner to take advantage of money-saving tax rebates and credits.
According to the National Renewable Energy Laboratory, homes with solar panels sell 20% faster and for 17% more than those without.
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How Does Homeowners Insurance Cover Solar Panels
If you have roof-mounted solar panels, the dwelling coverage on your homeowners policy may pay to repair or replace them if they’re damaged by a covered peril. Some insurers may not cover wind or hail damage to roof-mounted solar panels.
If you have panels on top of a detached structure, such as a shed, it’s possible the “other structures” coverage on your policy will cover them, but you should check with your insurer. Ground mounted solar panels may be covered under your other structures coverage as well. Some insurance companies may also allow you to add coverage for detached solar panels to your homeowners policy as a rider or endorsement.
Solar Panels And Your Home Insurance Policy
Homeowner priorities have been expanding in recent years. While the inside of the home is still their first concern, the add-ons are becoming more relevant than ever. Eco-friendly homes that can save people money are in high demand, and for good reason .
Solar panels are one of the most popular devices in this category. Not only are they not nearly as expensive as they used to be, but they can pay homeowners back tenfold. But how do you protect these investments? Are they integrated into your existing policy, or do you need to purchase something separate? Weve got answers to all your questions below.
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What Should I Look For In Home Insurance Contracts
As with any other contract, you shouldnt rush to sign your home insurance contract. Take time to read it carefully and involve an expert to help you understand how the stated policies affect your solar panels.
Among the key things you should look for includes the damages covered and the coverage limit.
Different insurance companies offer coverage for different types of solar panel damages. You, therefore, need to know what the insurance policy you choose covers. Some manufacturers dont cover damages from elements like wind which can affect your panels any time.
You should also know that your home insurance wont cover any damages caused during installation. Youll have to take up this issue with your installation warranty.
Additionally, confirm that the limit posed by your insurer is enough to replace your solar system if it comes to it.
Classing Your Home As A Place Of Business
In very rare cases, if youre selling your surplus solar electricity to the national grid via the governments old feed in tariff scheme or the new Smart Export Guarantee , an insurer may class your home as a place of business and wont cover you for home insurance as a result. If this happens, you should look at swapping to an alternative insurer.
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Is It Worth Getting Solar Panels
Yes! Even though the upfront costs appear to be quite high, solar panels offer you numerous opportunities to save money. Within an average of 4 years, the panels will have re-paid their worth, allowing you to enjoy free energy for life.
Solar panels also enable you to take advantage of the feed-in tariff, which improves your ROI and helps offset nearly 80% of your bills.
With the cost of electricity in the country skyrocketing daily, your home stands to save thousands with solar panels in the long run.
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If your home solar array includes separate buildings like covered parking or an outbuilding dedicated to energy storage they are considered separate structures on your insurance policy. This is where things get slightly complicated in the claims department. Most property insurance policies will have a set limit of coverage for your other structures, and it’s often 10% of your primary structure valuation.
In other words, if your home is insured for $200,000, the other structures at this address have $20,000 coverage, total.
That includes garages, carports, well houses, barns, fencing and stand-alone solar panels.
If you have more than one outbuilding, damage can add up quickly after a severe storm or a brush fire.
So take a look at your homeowner’s policy to be sure you have enough coverage in case of a catastrophe.
Hopefully, you’ve kept your insurance agent apprised of significant home improvements and investments in solar. If so, they’ve pitched additional coverage for your other structures, and you’ve purchased that extra coverage. In that perfect world, you’ll eventually be made whole for your damaged solar array.
Now, let’s switch gears and tackle the issue of solar panels and insurance claims from a commercial real estate perspective.
Commercial Property Insurance And Solar Panels
But not every commercial policy covers solar panels at CRE, especially as “other structures.”
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Are Solar Panels Covered By My Homeowners Policy
More Americans than ever are turning to solar panels to generate sustainable energy for their homes and businesses. The environmentally friendly, renewable resource provides unparalleled efficiency and savings compared to the traditional power grid.
From 2008 to 2018, solar panel installation in the U.S. has grown from 1.2 gigawatts to 58.3 gigawatts, according to the Solar Energy Industries Association. Thats more than a 4,750% increase and its enough capacity to power more than 11 million homes in the U.S.
If youve already purchased, or are considering purchasing, solar panels, youre probably wondering whether theyre covered under your homeowners insurance policy. Well get to that in a second.
First consider that, despite the positive outlook about solar panels, they are still a relatively expensive investment. Depending on the size of your home or business, rooftop solar energy systems can easily cost more than $35,000.
However, prices have decreased about 50% since 2010, so the average homeowner can install a system for about $20,000. You may come across local utility companies offering incentives and subsidizing up to 50% of the total cost, which could drop the price to $10,000. Solar panel grants for homeowners exist as well, so be sure to check which ones may apply to your situation.
The additional cost of a solar energy system will drive up the price of your home and, in turn, drive up the amount of coverage you need on your homeowners insurance policy.
Is Going Solar Viable Or Not
Currently, in some states, solar energy has been made mandatory for new upcoming homes. However, if you are in the process of buying a solar system, its good to understand that insurance companies will only insure the solar system that you own.
Therefore, if you dont own your solar system, then you cannot enjoy insurance coverage. This happens especially if an energy company installed your solar panels, and you only pay for electricity consumption. This means that youre technically not the owner of the solar panels.
While this can seem economical for you, it might, on the other hand, affect your home insurance policy. This is because, as the solar contractor is installing the solar panels on your roof, they will be using equipment that may damage your roof.
Therefore, your home insurer might consider this an additional risk, which might make them demand a higher premium.
Therefore, although solar energy is environmentally friendly and may also lower your electricity costs, it is also prudent to consider how to insure the solar system.
This is because they are quite an expensive investment that needs to be protected.
Therefore, when you decide to purchase some solar panels, let their insurance policy, be in your mind.
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Damaged Roof From Installation
Installing solar panel systems on your roof can possibly damage if you dont work with licensed and experienced solar installation teams. If a contractor damages your home, your homeowners insurance may not cover this damage, leaving you to pay out of pocket for the repairs.
The only way to know if your damages are covered is to reach out to your insurer. Theyll let you know if this particular damage is a covered peril. However, if you choose to partner with a reputable installation team, they will ensure that there is no damage to your roof during the installation process.
Make sure to look at reviews before settling with a contractor. This will give you an idea of what customers did and did not like about their services. You should also ask your contractor to show you their licenses and proof of insurance before performing any job. This will give you backup for coverage if your homeowners insurance refuses to cover damage from a contractors solar installation.
How Will Solar Panels Impact Your Home Insurance Policy
As with any alteration to your home, solar panels can and will change the cost of home insurance.
The total cost of your homeowner’s insurance is based on the value of your property. This value includes the structure of the house as well as the belongings kept inside. All appliances, electronics, and most home improvements you make are usually covered by the policy.
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Potential Problems Selling A House With Solar Panels
While its likely that solar panels will be an asset to your homes sale, its also possible that youll run into some complications, specifically with leased solar panels. Here are some things to be aware of:
You might need to buy out the lease, first. If youre worried about would-be homeowners feeling nervous about your solar contract, the smart path might be to pay off the rest of the lease before you sell the property. This reduces the new owners responsibility and allows you to transfer your panels outright.
You can transfer solar leases. If youre not willing to pay off the lease and you find a buyer who is ready to take it over, the next step is to transfer it into their name. This is a simple process, although it requires the cooperation of both the buyer and the seller.
Your new buyer will need to meet some credit requirements. If youre planning to transfer your solar lease to a new buyer, theyll need to meet specific credit requirements set by your third-party solar installer. While this isnt usually an issue, it can be a problem for buyers with low credit scores.
Youll want to maintain your panels before you sell. If your panels need any routine maintenance, carry this out before you sell your property. This makes them more attractive and accessible to new homeowners.
Can Solar Panels Installed On My Condo Be Covered
If you intend to install solar panels on your condo, note that this might be a little bit different. The condominium insurance policies might be very different from the home insurance policies, depending on the insurer.
Therefore, before you decide to install, you might want to talk to your insurer and get the full information. You should find out if there are any special considerations required to be made for the solar panels to be included in the condo insurance.
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Considering A Tesla Solar Roof Heres How It Will Impact Your Homeowners Insurance
The clean energy movement is a buzz with its latest breakthrough: The Tesla solar roof. Unlike bulky solar panels that jut out of your roofline and call attention to themselves, the Tesla solar roof is made of smooth tiles that look like a regular roof some would say theyre even more aesthetically pleasing. They collect energy from the sun and store it until your home needs it, eliminating the need for electrical power from another source.
Consumer interest in these revolutionary roofs is off the charts, but companies that provide homeowners insurance are a little more dubious. The reason? A Tesla solar roof is expensive. Very expensive.
The Cost of a Tesla Solar Roof
According to the calculator on the Tesla website, putting this new technology on a 2200 square foot home that requires a 70% solar roof would set you back $46,100. You should also spring for the $7,000 Powerwall battery to go with it.
To give an idea about how much the roof really costs, here is the cost of tesla solar roof as a proportion of median house values in the top 10 US cities.
Your insurance company doesnt care how much you spend on a car. If you buy a Lamborghini, theyll just increase your insurance premium to cover its replacement cost. This is not yet true for solar roofs. Your policy may specify that your roof will be replaced with a standard asphalt roof. Most insurance companies have a limit as to the amount they will pay to replace a roof, and its less than $46,100.
Lifetime Warranty
When Do I Need A Separate Insurance Policy For Solar Panels
If you have a ground-mounted or carport solar panel, you may need an insurance endorsement. Solar panels that arent a permanent fixture of your home are generally prone to more damage, so your insurance company may require you purchase extra coverage. Additionally, suppose you live in a high-risk area . In that case, purchasing more coverage is a smart idea, and your provider may require it as well.
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