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 does home insurance consider solar panels?
Homeowners insurance treats your solar panels as they would for your security, heating and air conditioning systems. Depending on your insurance policy, the coverage limit may or may not be enough to handle the repairs or replacement. Solar panels can cost as much as $25,000 and this amount certainly warrants a thorough knowledge of your options before you decide on having one or choosing the right insurance with which to have your home covered.
What conditions are covered by your policy?
Damage by fire
Any damage caused by a fire is generally covered by your home insurance. But similarly, the cause of the fire would have to be ruled out as not due to negligent use or outright disregard for electrical safety standards.
If your solar panels are damaged by a fallen tree, it can be covered as long as it can be proven that the tree fell because of a natural disaster and that you’ve taken every measure to prevent it from falling, beforehand. If your tree is diseased and you failed to cut it before a hurricane strikes, the scenario can entirely be different. It can very well be classified as a negligence issue.
Better ask your agent because different insurance companies would have a different stand on this issue. On the same manner that other companies don’t cover floods and earthquakes, coverage of wind damage to your solar panels is a good question for your insurer.
Normal wear and tear
Being a piece of electrical equipment, solar panels are subject to manufacturer’s warranty and certainly not by your home insurance. Wear and tear is an expected event and definitely not a risk that you cannot predict nor prevent by your own intervention.
What if your home insurance refuses to cover your solar panels?
While solar panels are generally covered by your standard insurance, the possibility of your insurer demanding that it be an add-on will be there. Solar panels are exposed to the elements and damages from natural causes. These, along with costly price present a challenge to every insurer who is trying to keep a hefty payout at bay.
If your insurer refuses to consider them as a permanent attachment, you can always look for a different underwriter. But in case you would want to remain with your insurance company due to more important reasons, then, having an additional endorsement will always be an option. But in this case, you can expect to have a more expensive premium. Whichever option you prefer, your knowledge of conditions that you should consider and details of your home insurance policy will be your best tools for making your decision.
To go solar or not?
In certain states, the use of solar energy has been mandated for new homes. But if you are just considering the option, do not forget that home insurance companies will underwrite only the properties that you own. In some regions, there are companies who install solar energy systems on households but charges only for the electrical consumption while retaining ownership of the solar panels. If you technically don’t own your solar panels, you are unlikely to be entitled to insurance coverage. While paying only for the actual electrical consumption can be a viable option, you can never put the other risks to the side.
Your contractor will be installing on your roof and bringing equipment that can potentially damage your roofing. Your underwriter can consider your solar panels as an additional risk and may ask you for a higher premium. Being electrical in nature, the possibility for somebody getting electrocuted or a fire getting started remains to be a possible risk.
Indeed, solar panels are efficient and environmentally friendly. But when you’re deciding to get one, you have to find out how your insurance policy considers such a big investment. And if you decide for an option where you only pay for your actual electrical consumption, the risks seem even bigger. Yes, your home insurance does cover them, but you have to find out to what extent.