Sound Advice – Solar Panels
Insuring Solar Panels
The price of solar panels has dropped more than 65% in the past five years. As a result, a new installation is going in somewhere in America about every 4 minutes. In addition, the option to lease the panels has made them affordable for people making $30K to $90K annually.
If you research the subject online, you’ll find there is much conflicting information on how best to protect your substantial investment in the panels. Some say that you don’t need any more insurance because they are covered by your Homeowners policy. Leasing companies typically require you to insure the panels and many offer their own insurance as part of the lease. Some say that because the panels typically have a 25 year manufacturer’s warranty, you don’t need any more insurance. So what’s the truth?
Here are the facts.
- Your Homeowners policy covers the panels if they are permanently installed on your roof. They may or may not cover ground installations of solar panels. Some companies may consider ground units to be non-permanent and more likely to be damaged by accident or vandalism because they are more readily accessible. Be sure to check with your agent to see if the type and location of the panels impact how and if they are covered by your Homeowners policy.
- Your Homeowners policy covers damages within certain dollar limits. When you add solar panels, you increase the overall value of your home… typically by about $30,000. As a result, you may need to adjust your limits upward to cover the added value to your home.
- You may need to up your fire limits. Roof mounted solar panels interfere with the ability of the fire department to fight a fire in your home should one occur. This means that any potential fire may result in more damage than to a similar house with no panels installed on the roof.
- You may or may not need a special “endorsement” or rider to cover the panels. Different insurance companies handle solar panels in different ways. Consult with your agent to understand how they are handled under your specific policy. Or like many high value items, they may need to be “scheduled” in the policy’s terms.
- Different policies may or may not cover specific risks. You want to know what your coverage is for the following types of damage: fire, theft/vandalism, snow/ice and storm damage from wind, lightning, tornado or hail. The panels are designed to be tough, but not indestructible.
- If you are leasing the panels and the insurance is part of your payment, share the contract with your agent. Your insurer will need to verify that nothing in the two policies conflict with one another. You may still need to make adjustments to your in-force Homeowners policy to cover your specific situation.
The bottom line is that coverage is not automatic and “one size does not fit all” when it comes to insuring your solar panel installation. Whether you choose to buy or lease, we’d be happy to consult with you about your specific situation and coverage needs.