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Homeowners Insurance and Solar Panels: Key Considerations

March 15, 2024 | Reading Time: 6 minutes

Just like putting on an addition or making any home upgrade, adding solar panels to your home will increase your property’s value and impact your homeowners insurance policy. We spoke with John Lapointe, of The Lapointe Insurance Agency in Fall River, Massachusetts to learn more about the effects solar panels may have on your homeowners insurance and how to make sure your panels are fully protected.

First and Foremost: Every Insurance Policy is Different

Lapointe emphasized that there are general tendencies of homeowners insurance policies but ultimately, every plan is different. The only way to fully ensure your solar panel system can be covered is to review your contract, reach out to your insurance agent, and become extremely familiar with the specifications of your policy.

Consult with Your Agency Before Committing to Anything

Lapointe strongly advised in contacting your insurance agency to let them know you’re considering solar before signing any solar contracts or making any payments. If you rush into your solar contract before clearing the system with your agency, you may realize too late that your policy doesn’t cover solar panels or can’t provide as much protection as you had hoped.

Reach out to your agency as soon as possible with information on your prospective system like where it will be installed, what kind of system it will be, your payment plan, and the total cost of the system.

The Extent of Solar Panel Coverage Can Vary

Some policies cover all solar system damage including wind, snow, hail, falling objects, or vandalism. Other policies offer less protection. These variations are one of the reasons it’s so important to get acquainted with the details of your policy before committing to go solar.

You Must Own Your Panels (Or Be on Your Way to Owning Them)

For your panels to be eligible for your homeowners insurance policy, you must have purchased your system outright or be paying off a loan that’s going to eventually result in ownership. Leased and PPA solar panel systems are typically not eligible for insurance as you do not assume liability for these systems. Instead, a third party owns and is liable for the system’s upkeep, leaving the responsibility of acquiring insurance to them.

Roof and Ground-Mount Systems Can Be Covered

Rooftop solar systems are eligible for homeowners insurance as they quite literally become an extension of your home. Despite ground-mount systems being detached from your housing structure, they can still qualify for homeowners insurance because they’ll fall under the “Other Structures” category.

Inquire About Maximum Coverage Amounts of Your Homeowners Insurance

Lapointe explained that some companies limit their coverage with a maximum dollar amount per client. Therefore, if the value of your home is hovering near the maximum coverage amount and you add a $30,000 solar system, your home’s new value may exceed that maximum. At this point, you would need to inquire with your agency for an increase in your coverage amount or find a new company that can offer it.

Solar Will Likely Increase Your Homeowners Insurance

It’s common for solar panels to increase the cost of homeowners insurance. The specifications of this increase or which components of the policy are affected will vary greatly. You may pay a higher premium or deductible, decide to bundle with auto or life insurance, or take a precautionary measure like replacing your roof and end up offsetting the increase with the rewarded credit. Your solar system, your policy, and your goals will majorly influence the cost of your homeowners insurance.

Get Them Covered or Risk the Sunny Side of Regret

The old saying, “Better safe than sorry,” is highly applicable to covering your solar panels with homeowners insurance. You’re investing in independent energy and ensuring your home with renewable and reliable power for decades to come—don’t let your experience come to a screeching halt if an unforeseeable accident occurs.