Solar panel insurance: A guide to home insurance for solar

Installing solar panels is one of the easiest ways to start saving some serious cash on your electricity bills.

But, before installing them, it is essential to find out how solar insurance works. After all, you want to be sure that both your home and your solar panel system are properly covered before the solar panels are drilled onto your roof!

How will solar panels impact your home insurance policy?

As with any alteration to your home, solar panels can and will change the cost of home insurance.

The total cost of your homeowner's insurance is based on the value of your property. This value includes the structure of the house as well as the belongings kept inside. All appliances, electronics, and most home improvements you make are usually covered by the policy.

Are solar panels covered by home insurance?

Yes, most home insurance policies do cover rooftop solar panels.

By installing solar panels you are enabling your house to produce its own electricity. These rooftop solar panels are usually considered a permanent attachment to your property, similar to a patio or a security system and can, therefore, be considered a form of home improvement.

Do solar panels increase home insurance premiums?

The coverage you had in place before installing new solar panels may not be enough to cover the cost of repairs or replacements in the event of filing a claim.

Consider this: the typical cost of solar installation runs between $10,500 - $14,700 after applying the 30% federal tax credit. That's a decent-sized investment in your home. You may want to increase your coverage limits to make sure your homeowner's policy protects those new solar panels.

Just remember the higher your coverage limits, the more expensive your insurance premiums are likely to be. To find out if your premium will increase and to ascertain how much, you will need to get in touch with your insurance provider.

Some solar systems might need a supplemental policy

Some types of panels (ground mount solar panels or solar carports) may not be covered under your home insurance.

Even worse, some insurance providers might not cover such panels at all.

To protect your investment, you'll need to purchase a supplemental insurance policy to pick up where your home insurance leaves off. Your home insurance premium won't change, but your monthly insurance costs will.

Speak with your insurance agent to see what your options are and whether or not your existing policy will protect the panels in the first place.

Odds are, if your panels are mounted to the roof of your house, they're considered part of the structure of the home, thus your home insurance policy covers them.

If you install them on an out-building or build a separate support system on the ground, your panels may not be covered.

What happens if my roof is damaged while solar panels are being installed?

Installing rooftop solar panels can damage your roof unless you work with an experienced and licensed solar installation team. Your home insurance may not cover this damage, forcing you to pay for repairs out of pocket.

The only way to know for sure is to speak with your insurance agent. In most cases, your home insurance can cover the cost of any damage caused by the installation.

However, by choosing a reputable contractor to handle the installation, you can keep this from becoming an issue at all. An easy way to find a reliable solar installer is to check consumer reviews on our solar companies page.

Leased and PPA solar panel insurance

If you are leasing your solar panel system or if you bought it on a power purchase agreement (PPA), the panels will be covered by the third party who technically owns them.

This means you won’t have to worry about insurance at all. However, always clarify the details with the PPA or lease provider before signing any agreements.

The insurance might not cover certain disasters

Homeowners insurance coverage for natural disasters can vary from policy to policy, but most standard policies do not cover events like floods or earthquakes. However, your insurer might provide add-on coverage. In some of the hurricane-prone states, standard home insurance policies do not include wind insurance.

Do check with your insurance provider if this is the case and ask for any add-on policies they might offer.

How do you protect yourself against solar panel theft?

Tell your home insurance provider! 

If you told them you installed solar panels, you’re covered. If not, you’re not. Oftentimes they won’t even raise your premium.

Solar panel theft is extremely rare in the U.S., but it happens. It also usually happens on properties with ground-mounted systems (thieves are lazy). In Europe, where solar is much more prolific, solar panel theft is a more common phenomenon.

What happens if my home insurance won't cover the panels?

If your home insurance provider refuses to cover your solar panels, start shopping for a new policy.

Different insurance agencies provide different types of home insurance. Even better, you might be able to save on the cost of home insurance by switching companies.

In some instances, adding panels can decrease the cost of your home insurance premiums each month.

Why? Because it makes your home more efficient.

Many insurance providers offer discounts on home insurance costs if you make the house more eco-friendly. Adding solar panels to power your home definitely fits the bill.

Solar panel insurance: The bottom line

The only way to know if the price of your homeowner's insurance will increase due to the solar panels is to speak with your insurance agent.

Discuss your plans with your insurance company before you schedule a consultation for installation. If they don’t cover the panels, you'll want to start shopping around for a new policy before installing the panels.

If they do cover the solar panels, listen to your agent's suggestions. They may recommend increasing the coverage limits to protect your investment, in which case, make sure to ask about current discounts.

By rolling your auto insurance over to the same provider, you may save enough to bring the cost of your premiums down to where they used to be.