Will Homeowners Insurance Cover Solar Panels If They’re Leased
As we mentioned earlier, if you decide to lease your solar panels, then your homeowners insurance generally isn’t responsible for covering them. Instead, the company you lease your solar panels from should hold an insurance policy for them, as they are responsible for keeping up with the panels and repairing or replacing them as needed.
If you rent an apartment, you normally aren’t responsible for buying a new refrigerator or stove if yours breaks the landlord is. In this case, think of the solar company youre leasing from as the landlord of your solar energy system.
Thats why its important that you understand the warranty and insurance coverage offered by your solar company, so you can determine if you need additional insurance coverage of your own. For instance, if something happened to the solar panels, and they damaged your roof, you need to know who is responsible for covering the repair of the roof.
So What Events Are Covered By The Solar Insurance Policy
Damage By Fire
The first condition that your home insurance policy covers are any damages that occur as a result of a fire. This means that when a fire burns down your house or destroys the solar panels, you are eligible for compensation.
However, you should note that for you to be compensated, the insurance firm must ascertain that the fire was an accident and not as a result of negligence or intentional. If they can prove that the fire occurred due to negligence or disregard for the electrical safety requirements, then it might be hard to receive compensation.
Lets say that your panels have been damaged by some fallen objects, such as a tree. You will receive compensation only if the insurance firm can determine that the tree fell as a result of natural causes and that you had taken every possible measure to prevent the fall.
If, for example, the tree that fell was diseased and you failed to cut it down, it might be difficult to get compensation even when a hurricane causes the tree to fall. This is because it can be categorized as an event of negligence.
Therefore, you should ensure that such occurrences are looked into, to prevent damage.
The wind is a natural phenomenon, and some insurance companies may not be offering policies to cover wind damage. Therefore, you should ensure that you ask your agent before you purchase that policy.
Having the full and correct information will ensure that you make the right decision.
Usual Tear And Wear
Solar Panel Insurance: How Solar Panels Affect Home Insurance
Solar panels are a great investment if youre looking for a way to generate energy and save money at the same time. And like with any great investment, youll want to protect your solar panel system.
So how do you cover your solar panels? Is there solar panel insurance you can purchase?
The good news is that you may have coverage under your homeowners policy. Keep reading to learn more.
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Connect With Your Insurance Agent
“As soon as your installation is underway, let your agent know what the cost of the panels is, and where they’re being installed so that he or she can make sure you’re properly covered,” says Bill. If they are installed on your roof, it’s simple: they are considered part of the home, and will be covered under your regular homeowner’s insurance. However, you want to make sure that your policy reflects the new, increased value of your home.
If your solar panels are not on your home’s roof for instance, if they are installed on top of a detached garage or if they are free standing on a post in your yard you may have to insure them as a scheduled structure, Bill says. Either way, your insurance agent can help.
Do Solar Panels Increase Home Insurance
Homeowner policies typically rate their premiums according to the value of the house to adequately cover the home in the event of a covered accident. So youll need to increase your insurance policy to match the increase in your homes value.
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Solar Installation Contract Items To Look For
When looking into who will install your solar panels, to ensure your insurance may cover you appropriately you should consider aspects in your installation contract such as:
- Product and labour specifications
- Does your policy state who is responsible for aspects such as connecting your system to the grid and meter changeover? .
- Does your insurance state anything relating to solar credits or Renewable Energy Certificates?
- Are there any estimates of daily electrical output, annual power production and production listed?
This is not a complete list, and you should always speak to your current insurance provider as to any aspects they wish to be included.
Insurance Of Solar Panel Components
Now, you will see written above about the fact that solar panels are not insured separately under your home and contents insurance. This means that you must ensure that any issues with the components will be covered under a product warranty and/or guarantee. Aspects to consider include:
- How long does the money-back guarantee last? It should last for at least 5 years, and usually up to 10 years.
- Workmanship/labour warranties should be 5-10 years .
- Warranties that relate to performance should last for around 25 years.
- Warranties relating to the components of your solar system, such as the panels and any other working parts, should last 5-10 years
It is worthwhile to remember as well to obtain written statements from any supplier and installer that you choose to go with relating to any information they provide about the systems proposed performance, warranties and guarantees. This documentation is crucial if you ever have to make an insurance or warranty claim.
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When To Get A Separate Insurance Policy
People who have a ground-mounted or maybe a carport solar panel will require an insurance endorsement. Solar panels that arent a permanent fixture are usually prone to get damaged, so the insurer will require you to purchase extra coverage.
Also, if you live in a high-risk area like the one hit by tornadoes, or hurricanes, you will want to purchase more coverage.
Location Affects When You Need To Clean
Where you live plays a huge role in how often you need to clean your solar panels
- Dry, dusty environments, like the US Southwest
- Wooded areas, especially if there is a lot of bird activity
- Polluted or smoggy regions, such as those near factories and highways
your panels should be wiped down about twice a yearMORE
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What Type Of Solar Panel Damage Is Covered
Homeowners insurance will cover your solar panels from the same types of damage and loss that the rest of your home is covered against. Perils that might cause solar panel damage that are covered by your policy include:
Weight of snow or ice
Homeowners insurance doesnt cover damage caused by earthquakes, flooding, or pests , so if any of these cause damage to your solar panel system, your insurer wont reimburse you for the loss.
Questions For Your Insurance Broker
As mentioned above, depending on where your home is located, or if you are looking for commercial solar insurance instead, the insurance carriers you talk to may have different policies about insuring solar panels.
If you have a farm, or other large property and have installed a large solar system on your property, your homeowners insurance companies may exclude coverage for larger scale residential projects where net metering is a large portion of the annual energy usage.
Some states, such as Florida, may also require carrying general liability insurance for solar panels to cover potential 3rd party claims due to electrical risks.
Before having solar panels installed on your house, be sure to ask your insurance broker to request a copy of the proof of general liability insurance from your solar installer.
Your solar installer should have general liability insurance covering ongoing and completed operations to be fully insured for any 3rd party bodily injury and property damage that they could cause in the course of their doing business.
What If I Want Better Homeowners Insurance For My Solar Panels
If you dont like the answers your insurance company gives you, you may wish to start looking for better coverage from a company that does insure solar power. Here are some examples of leading providers that offer quality solar panel coverage:
- Nationwide – As a standard policy, Nationwide advises that you both increase your current coverage limit, and confirm whether or not you need a separate policy for your panels.
- Allstate – Before investing in solar panels, Allstate recommends checking city laws and homeowners association policies for any regulations about solar power. In some places, an HOA can restrict solar panel installations.
- Kin – Kin reminds you to examine your current insurance coverage to see what type of damage is and isn’t covered. For example, you may be covered from hurricanes and wildfires, but not acts of war or earth movements.
- American Family Insurance – Some insurance policies only cover the solar panels that specifically power your home. American Family Insurance reminds people that, if you install more panels than your home needs for 100% of its energy consumption, those excess panels might not be covered.
Some Solar Systems Might Need A Supplemental Policy
Most insurance coverage providers will, in most cases, cover for rooftop solar panels but might fail to cover other types of solar systems under the home insurance.
For example, for solar carports and ground-mounted solar panels, you may be required to purchase an extra policy to cover them. Worse still, some insurers will not offer insurance covers for these types of solar systems at all.
Therefore, to ensure that your investment remains covered, one option is to buy that supplementary policy to cover where your home policy wont cover. This means that your monthly cost for insurance will increase, although the home insurance premium remains the same.
To be on the safe side, make sure to talk to your insurance agent, and get all the information you require to make an informed decision. Be sure whether they will cover your solar panels or not, and let them give you all the available options.
What of The Leased Panels And The PPA Solar Panels
Whether you have leased your solar panels or have acquired them through a PPA , your solar panels are still safe. These will be insured by the third party or company, which technically owns the solar panels.
This implies that you need not worry about insuring your solar panels at all.
Nonetheless, you still need to confirm this with the lease or PPA provider before you can sign the agreements.
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Solar Panel Insurance Guide: What Are Your Options
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Are you looking for solar panel insurance cover for your solar system? Well, here is a guide for everything you need to know about insuring your solar panels.
How Much Does It Cost To Insure Solar Panels
How much does it cost to insure solar panels?
With over 3 million homes in the United States having solar installed as of 2021,1 insurance companies have a simple calculation to determine what they will charge you to add the solar panels onto your homeowners insurance .
If you live in California your carrier may not even use a separate endorsement, because the state is mandating solar panels for new construction.
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What Type Of Damage Is Covered Under Home Insurance
Home insurance will cover permanent rooftop solar panels from all the same types of damage as your dwelling. For instance, if a windstorm damages your panels and the roof or a fire that damages the entire home, youd then be able to replace the solar panels at minimal additional cost.
If the solar panels arent a permanent fixture, you will want to check your insurance policys riders for additional coverage. Getting protection from floods and hurricanes is essential thats why if needed, buy additional coverage for them.
Does Home Insurance Cover Solar Panels
The search for efficient and renewal source of energy has given the use of solar panels widespread popularity in recent decades. While they may be considered as costly investments, the rewards certainly outweigh the heavy price tag by providing cheaper and environmentally friendly electricity. If you are considering installing a solar energy system on your roof, you might want to find out whether your home insurance will cover repairs or replacement when the need arises.
Roof-installed solar panels are structures that are permanently attached to your your home. As such, standard homeowners insurance does cover them generally, so to speak. But on the same manner that insurance policies differ in conditions, knowing exactly if your circumstances fall within allowed provisions will save you from potential troubles.
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How Much Do Solar Panels Cost
The cost you pay for solar panel installation can vary depending on the kind of system you buy and where you live. As with any other purchase you make, its best to shop around before purchasing. According to EnergySage, solar panels cost an average of $13,000 after solar tax credits are applied.
When comparing the cost of solar panels, its important to consider incentives as they can reduce the amount of money you end up spending significantly. The federal government has recently extended a renewable energy tax credit known as the investment tax credit . The ITC allows you to deduct 26% of the cost of installing a solar energy system from federal taxes in 2020 and 22% in 2021 .
States and local governments also offer financial incentives like cashback, property tax exemptions, fee waivers and rebates. Check the Database of State Incentives for Renewables and Efficiency to see what credits you could qualify for. But if you dont want to buy a system outright, or if the price is a little too steep, you could get a solar loan.
Solar leases generally require no down payment and will cost you anywhere from $50 to $250 a month.
Some states offer solar leases and power-purchase agreements that allow you to rent a solar panel that a third-party company technically owns. You can either pay the company a monthly payment or pay for the power you produce . Solar leases generally require no down payment and will cost you anywhere from $50 to $250 a month .
The Insurance Might Not Cover Certain Disasters
Floods and earthquakes are usually not covered under standard home insurance policies, but most insurers provide an add-on to cover them as well. In some of the hurricane-prone states, standard home insurance policies do not include wind insurance.
Do check with your insurance provider if this is the case and ask for any add-on policies they might offer.
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Do Solar Panels Increase Home Insurance Premiums
The coverage you had in place before installing new solar panels may not be enough to cover the cost of repairs or replacements in the event of filing a claim.
Consider this: the typical cost of solar installation runs between $11,389 – $13,919 after applying the 26% federal tax credit. That’s a decent-sized investment in your home. You may want to increase your coverage limits to make sure your homeowner’s policy protects those new solar panels.
Just remember the higher your coverage limits, the more expensive your insurance premiums are likely to be. To find out if your premium will increase and to ascertain how much, you will need to get in touch with your insurance provider.
What Happens If My Home Insurance Won’t Cover The Panels
If your home insurance provider refuses to cover your solar panels, start shopping for a new policy.
Different insurance agencies provide different types of home insurance. Even better, you might be able to save on the cost of home insurance by switching companies.
In some instances, adding panels can decrease the cost of your home insurance premiums each month.
Why? Because it makes your home more efficient.
Many insurance providers offer discounts on home insurance costs if you make the house more eco-friendly. Adding solar panels to power your home definitely fits the bill.
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What Is An Umbrella Policy For Solar Panels
In some states, utility companies require customers to carry liability insurance if they generate solar power. By requiring liability insurance, the utility is protecting itself from legal expenses caused by a customers net metering system malfunctioning.
Generally speaking, the larger your system, the more liability coverage youll have to carry. In Florida, for example, homeowners with solar panel systems greater than 10 kilowatts in size are required to carry $1 million in liability coverage.
Although homeowners insurance includes personal liability coverage, most companies only let you carry up to $500,000 of it, so where do you find the other half a million in coverage? By purchasing a personal umbrella policy.
Personal umbrella insurance provides policyholders with additional liability coverage that goes beyond their home and auto insurance coverage limits. In the event that your home or auto insurance liability limits are maxed out during a claim, your umbrella policy will kick in to cover any additional liability expenses.
This coverage is typically offered in increments of $1 million and up to $5 million, with a base policy costing around $300 a year.