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Insurance coverage for solar panels

Posted by Scott Stueber on Jul 13, 2021 9:11:45 AM

Insurance coverage for solar panelsSolar panels have been gaining popularity and are a great way to save some extra money. The Solar Action Alliance has listed seven reasons why you may want to consider adding solar panels to your property.

  • Lower production costs: For the same amount of money, you get more power.
  • No maintenance cost: There’s little or no maintenance once installed.
  • They’re a renewable energy source and provide clean energy.
  • Over time, they result in reduced energy costs.
  • Panels are easy to install and homes with solar panels are easy to sell.
  • Homes with solar panels may see greater appreciation due to reduced energy costs and a self-sustaining power source.
  • Government support: The government may offer or guarantee unsecured loans.

The cost of solar panels in 2021 is about $20,000 after tax credits ($2.81/watt for a 10 kW system) and the cost of solar has fallen more than 20% over the past 5 years. A quick google search of solar panel installers in my area shows several companies ready to help get homeowners started.

If you’re thinking about investing in such a large project, you might ask, “Will my homeowners insurance cover my solar panels?“

The Home and Highway® policy does cover solar panels, subject to the limits and exclusions on the policy.

  • If the solar panels are attached to the roof of your home and there’s a loss, you would receive replacement cost coverage, or the amount necessary to fully repair or replace the panels. You’ll need to increase the value on the main dwelling portion of your policy to account for the cost of the solar panels.

  • If the solar panels are attached to the roof of your detached garage or another outbuilding, that loss is also paid with replacement cost coverage. Again, you’ll need to make sure you have enough coverage on the “other structures” portion of your policy to account for the cost of the solar panels.

  • If the solar panels are located on the ground or attached to a non-building structure, the loss is still covered, however, at actual cash value or what the panels are worth at the time of the loss. Like panels attached to the roof of your home or another structure, you’ll need to make sure you have enough “other structures” coverage to account for the cost of the solar panels, but based on actual cash value.

At the end of the day, the cost of solar is only as important as the return you’ll get from installing solar panels. For most homeowners, solar is a worthwhile investment as you can “break even” in as few as seven or eight years. From that point on, you’re essentially generating free electricity and racking up the savings.

Please contact your independent insurance agent with questions and to make sure these solar panel systems qualify for coverage.

Do you have any tips you’d like to share? I’d love to hear them; please share them in the box below.

Sources:

https://solaractionalliance.org/

https://news.energysage.com/

This article was written by Sarah, senior Personal Lines underwriter.

This article is intended for general educational and illustrative purposes only and should not be construed to communicate legal or professional advice. Further, this article is not an offer to sell insurance. Please consult with your licensed insurance agent for specific coverage details and your insurance eligibility. All policies are subject to the terms, conditions, limitations, definitions, and exclusions contained therein.

Topics: Home Insurance

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