Does Homeowners Insurance Cover Solar Panels?

Homeowners insurance often covers solar panels through a policy’s dwelling or other structures coverage depending on where the panels are mounted. However, these may have insufficient limits or exclusions, necessitating an increase in your coverage or a scheduled property floater. Those who are leasing panels will likely get warranty coverage through their solar company or their partners for the panels themselves and their home in case of faulty installation.

Learn about when you should get solar panel insurance, how to purchase it and practical ways you can avoid filing a claim.

On This Page

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  When Should I Get a Separate Solar Panel Insurance Policy?

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  Do I Need Insurance Coverage if I Don’t Own Solar Panels?

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  How Do I Avoid Claims Once I Get My Solar Panels Installed?

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  Do Solar Panels Increase My Home Insurance Rates?

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  Can Solar Panels Decrease the Cost of Home Insurance?

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  How To Get Solar Panel Insurance

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  FAQs

When Should I Get a Separate Solar Panel Insurance Policy?

There are several considerations to take into account when deciding whether to add a scheduled property floater or endorsement for your solar panels to your home insurance policy. Consider any perils that may be excluded from your carrier's coverage, if your solar energy system is ground-mounted or mounted on your roof and the size of your system.

Your homeowners coverage will usually provide protection for your solar panels if they're attached to your home, such as on a roof, through your policy’s dwelling coverage. However, insurance companies like Wawanesa claim that perils such as wind and hail damage might not be covered.^[1] If your homeowners plan excludes these coverages, you should consider an endorsement that will specifically cover your solar panels.

It's possible you may also have to get extra coverage if you have ground-mounted solar panels. For instance, the other structures portion of your policy that would apply to ground-mounted panels may provide limited protection, usually 10% of your dwelling coverage.^[2] Hippo Insurance warns that homeowners should increase their coverage limits for their dwelling coverage due to the increased risk of having solar panels so close to the ground.^[3] You may also need to increase the limits of your endorsement if you feel they are inadequate, especially when considering the average cost of installing a home solar panel system is $16,715 in 2023, even after applying the federal solar tax credit.^[4][5]

Additional coverage may also be needed for excessively large solar energy systems.

A normal amount of panels typically generates power for a 4 Kw to 10 Kw system.^[6] Ideally, you'll pay very little for electricity or you'll get some kind of credit from the power company for excess power you generate and don't use. Larger systems that are essentially guaranteed to generate a credit every month may be excluded from home insurance coverage and instead may be considered a business, necessitating separate commercial insurance.^[6]

Do I Need Insurance Coverage if I Don’t Own Solar Panels?

When leasing solar panels, the leasing company will usually hold an insurance policy that covers theft as well as repairs to damaged solar units, potentially eliminating the need for you to insure them yourself. You will need to check with your leasing company to see if they offer protection and if so, what their insurance coverage provides.

How Do I Avoid Claims Once I Get My Solar Panels Installed?

Even if you have insurance for your solar panels, you should still be proactive in making sure you never have to file a claim by taking these steps

• Make sure your system is installed by a professional: Your installer should be certified through the North American Board of Certified Energy Practitioners (NABCEP). Improper installation could lead to water leaks into your home during the first rain and your insurance company may not cover damages resulting from improper installation.
• Ensure your panels are secure: Loose panels are easier to steal, especially the ones that are ground-mounted.
• Maintain defensible spaces: These areas are used as a buffer between your home and possible fire areas. Clear dry brush away from your property to mitigate the spread of fire. Otherwise, your solar panels and your home could go up in smoke.
• Cut down or trim trees: A heavy wind can uproot healthy trees, causing the tree or branches to fall on your house or other property, potentially damaging your solar panels.
• Keep outdoor activities away from the house: This includes baseball, basketball or any other activity that could cause something to hit and damage your solar panel system.
• Check your warranty: These warranties can include protection against poor system output or performance, as well as workmanship coverage in case damage is caused to your home due to poor installation.

Do Solar Panels Increase My Home Insurance Rates?

Installing solar panels adds to your home’s rebuilding costs if it is destroyed in a hurricane or fire, which can result in having to pay higher insurance premiums. In addition, you may need to increase the limits of your current homeowners insurance policy or purchase an endorsement to properly cover your solar energy system should a covered event occur, which would also increase your home insurance rate.

Can Solar Panels Decrease the Cost of Home Insurance?

While installing solar panels can increase your home insurance rates because it increases your home’s rebuild costs, it’s also possible that you may qualify for a green discount that can either offset that rate hike or even lower it. In order to qualify, your home will likely need to be LEED (Leadership in Energy and Environmental Design) certified. This means you're using environmentally conscious materials in your home to reduce your carbon footprint. For instance, Kin Insurance offers its California customers a 5% discount for installing LEED certified equipment.^[7]

How To Get Solar Panel Insurance

Installing a solar panel system for your home is a large investment and will obviously raise the value of your home which will also raise your rates. Since your insurance needs will be changing anyway, take this opportunity to shop around for new coverage by getting quotes from several home insurance providers. Carriers will ask about the size of your solar unit, your home’s age, where it’s located and how many people are living in your home.

To help streamline the information-sharing process, fill out SmartFinancial’s questionnaire and you will get quotes from several insurance companies that will fit your budget and needs, sometimes in minutes. Start by entering your zip code below to receive your FREE insurance quote for solar panel home insurance.