does my home insurance cover solar panels

Does My Home Insurance Cover Solar Panels?

Does my home insurance cover solar panels?

Yes, it should. 

Adding solar panels to your homeowners insurance policy should be easy in most places in the United States.

Does My Home Insurance Cover Solar Panels?

When you look at your homeowners insurance policy, in the first few pages you should find the “Declarations” page which will list the property and liability insurance coverages. 

Under the property section you’ll see a few different coverages for your home, including:

  • A. Dwelling
  • B. Other structures
  • C. Personal property
  • D. Loss of Use

The first item is known as “Coverage A” or “Dwelling” coverage. This item in the property insurance portion of your homeowner’s insurance policy covers where you live and anything permanently attached to your home, such as solar panels

Cost To Insure Solar Panels

Property is valued in a few different ways, including actual cash value, agreed value and replacement cost.

The cost to insure solar panels depends on a variety of factors including the property value and an acronym called “COPE” which stands for construction, occupancy, protection and exposure. 

Once the solar panels are added to your home insurance policy, you should expect to see a slight premium on the cost of your insurance to cover the replacement cost of having to rebuild your home – including the new solar panels, – in the event of a total loss from a covered peril, such as a fire.

Solar panels should add value to your home. 

A more expensive solar panel system, like a Tesla Solar Roof, will cause the replacement value of your home to increase more than standard roof mounted photovoltaic panels.

Insurance For Leased Solar Panels

If the panels are leased, you should not have to insure them because you don’t own them. 

Until you actually own the system, the property insurance covering replacement cost of the solar panels should be under the solar contractor’s insurance, not yours. 

If the solar company is requesting that you pay for the property coverage for the solar system you may want to talk with other solar installers to compare purchasing terms. 

Until you take possession of the system – usually after the system is fully paid for – you shouldn’t have to pay to insure their value.

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.

If you are installing a large commercial solar system, talk to your insurance broker to make sure you are properly indemnified in your contractual agreements with the solar installer.1

Footnotes

  1. Or if you are a solar installer or EPC that uses subcontractors, make sure you have proper indemnification language in your agreements with your subcontractors and that they have their own worker's compensation insurance.
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