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Are Solar Panels Covered Under Homeowners Insurance?

  • Insurance 101
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  • Are Solar Panels Covered Under Homeowners Insurance?

Putting brand new solar panels on your home isn’t cheap. But over time, it drastically reduces the amount you pay for your home’s energy each month.

But what about solar panel insurance? Many people wonder if it’s a real thing and if adding solar panels to home insurance is a possibility.

The good news is that most homeowners insurance policies cover solar panels if they are attached to your home. At that point, they’re considered to be a part of your home and are protected under Coverage A of your policy.

The classification of protection under the dwelling portion of your policy is extremely important. This is the loftiest form of coverage you can get on your home and is often just the right amount of coverage is something catastrophic were to happen.

Since solar panels typically run homeowners tens of thousands of dollars, it is also important that you speak with your agent and increase your dwelling coverage to kick in when the solar panels are installed.

This is incredibly important because it means your policy probably won’t need to be changed and you probably won’t have to deal with pesky riders to extend coverage.

Every case is unique, though, and we highly recommend contacting your insurance agent once you decide on the type of solar panels you want to get for your home. Some insurance companies may not cover this huge addition without some major changes in your policy.

As with any insurance claim, if your home’s solar panels are ever damaged or destroyed, insurance will only cover the cost to repair or replace them if the damage or destruction was caused by a covered peril.
 
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Fine Print of Adding Solar Panels to Home Insurance

Solar panels can save you a ton of money over the course of their life, but they can also cause a whole lot more hassle with your insurance policy policy if you don’t know the fine print.

Inclusion on Coverage A: Dwelling

Only solar panels that have been installed on your home’s roof can be covered by Coverage A of your homeowners insurance policy.

Installing panels on the roof of your home effectively makes them an actual part of your home’s integrity — just like a window, side panels and your roof.

In this case, you will most certainly need to up your dwelling coverage on your policy. That’s because your home may be worth, and insured for, something like $200,000 before the panels were installed.

But the addition of $30,000 solar panels on your roof can increase your home’s value by just as much. In this case, we’d recommend increasing your dwelling coverage to at least $230,000.

Inclusion on Coverage B: Other Structures

Solar panels that are mounted on the ground or on top of carports, sheds or other structures may be excluded from your homeowners insurance coverage altogether.

But, at best, they may fall into Coverage B of your policy, which protects structures on your property that aren’t connected to your home, such as fences and sheds.

Since other structures coverage is usually up to 10 percent of your total dwelling coverage, that means you’d have to increase the latter to make a difference to the former.

Other structures are also not as reliable as the roof of your home. Carports and sheds tend to be damaged by weaker storms or natural disasters than the integrity of your home. In that case, installing solar panels on your shed would deem to be riskier.

If you decide that solar panels are the right move for your home, you’ll need to increase your coverage — no matter where you install them.

It’s always better to call your insurance agent beforehand to make sure you’re doing everything properly and that the panels will be covered in the long run.

The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.