Does Homeowners Insurance Cover Solar Panels?

The majority of homeowners insurance policies typically cover roof-mounted solar panels which are permanently attached to a home but only if the panels are damaged from a covered event. Policyholders should contact their insurer to verify how they handle solar panel coverage. Ask if variables like ground-mounted panels vs roof-mounted, location, local climate and placement of the solar panels impact your coverage. Plus, homeowners should ask if coverage includes hail damage, fire, theft and wind. Depending on the type of solar system and solar panels, homeowners may need to buy separate policies to cover their particular system.

How Does Homeowners Insurance Cover Solar Panels?

According to the U.S. Department of Energy's National Renewable Energy Laboratory, residential solar panels are generally covered under a standard homeowners insurance policy, which typically offers protection against specific perils such as wind damage, fire or theft. The first few pages of your homeowners insurance policy list the liability and property insurance coverages. Under the property section, there are two coverages that apply to solar panels:

Type of coverage

What it covers

Dwelling Dwelling coverage is the property insurance section that covers your residence and anything permanently attached to the home, such as roof-mounted solar panels. Not all insurers will cover hail or wind damage to roof-mounted panels.
Other Structures Solar panels that are not attached to your home, (such as sheds, ground-mounted panels or carports), might be covered under the “Other Structures” coverage of your policy.

Policyholders should confirm coverage with their insurance agent. Some insurers allow added coverage for detached solar panels on their homeowners insurance as an endorsement or a rider.

Do Solar Panels Increase the Cost of Homeowners Insurance?

Homeowners may see an increase in their homeowners insurance rates and may need to raise their coverage limits to cover the cost of replacing their solar panels. Installing and repairing solar panels can be costly and will likely raise premiums. However, compared with the value of solar panels, the increase in insurance premiums may be worth it.

The majority of homeowners insurance policies typically cover roof-mounted solar panels.

Can Solar Panels Decrease Homeowners Insurance?

While most home insurance policies will cover solar panel systems, your premiums might go up or you may be charged a hefty fee for your system because it adds value to your home. Because solar paneling is still a relatively new home improvement, there can be a large difference between how different insurers handle solar panel insurance so it’s a good idea to compare rates and insurance companies.

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

Homeowners who want to install solar panels but can’t financially afford it may be interested in other options. Solar panel companies offer leasing options so homeowners can install solar panels at little to no up-front cost. Remember that you do not own the solar panel system, which means you won’t be responsible for maintenance and upkeep, nor are you required to insure it.

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Should I Purchase Solar Panel Insurance Separately?

In some instances, homeowners may need an add-on to their homeowners insurance policy or a separate policy altogether for solar panels. For example, if you mount your solar panel system in your yard instead of your roof, you may need additional coverage since it isn’t considered a part of your actual dwelling. The same goes for solar panels installed on your garage or a freestanding structure like a shed. These may require a separate policy or a rider in addition to your existing homeowners insurance.

FAQs

Will home insurance cover my roof if a solar panel damages it?

Every insurance policy is different, so it’s best to confirm that your insurance provider’s coverage will extend to the installation process. Additionally, most qualified, professional installers will provide a workmanship warranty that should cover your roof in the unlikely event that the roof is damaged as a result of the installation process.

Can I install solar panels if I live in an HOA community?

Access to solar technology laws assure that HOA communities cannot prohibit members from installing solar panels. Still, HOAs may be able to place “reasonable restrictions” on solar systems.

Should I raise my coverage limits if I get solar panels?

It's best to increase your coverage to ensure that your solar panels are protected. Your agent can help determine how much coverage you need to be adequately covered.

Key Takeaways

  • Solar panels are a great investment that can reduce your energy bill to zero, but the cost to repair and replace them if they are damaged is hefty, which is why the right insurance coverage is so important.
  • If your insurance company doesn't provide coverage or offers limited coverage for solar panels, then you may need a separate policy.
  • Having solar panels installed will most likely see your home’s rebuild value go up, which will likely mean higher homeowners insurance rates.
  • If you lease your solar panels, you don’t have to worry about insuring them.

Are You Shopping Around for Better Homeowners Insurance Coverage?

While most homeowners insurers will consider roof-mounted solar panels permanent attachments to your home, there may still be extra costs that come with solar panel insurance. It might be time for you to shop around for a cheaper insurance policy. SmartFinancial can help you find the perfect homeowners policy with its free online tool that compares rates from many top insurance providers in your area. Just enter your zip code below or call 855.214.2291 to get your free insurance quotes and find the policy that’s right for you.

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