Are solar panels covered by home insurance?

Before taxes, an installed rooftop solar energy system can cost anywhere between $15,000 and $25,000, according to the Center for Sustainable Energy. Paying to replace a damaged system could be a big financial burden for some homeowners. Being able to insure that investment against damage from a storm or other event could be key in whether or not you choose to add solar panels to your home.

It’s an issue of concern to an increasing number of homeowners each year. According to the Solar Energy Industries Association, residential solar energy has experienced an average yearly growth rate of 68% over the last decade. Here are some things to know about insurance coverage and home solar panels.

Get solar panel insurance 

Solar panel insurance coverage is included in most homeowners insurance policies, which means no separate solar panel insurance is needed. Solar energy systems and the rooftop panels or tiles are largely considered a permanent attachment to your property, similar to a patio or a security system. It’s important to note that some policies may exclude damage to these attachments when it's caused by a particular threat, such as wind.

Adjust claim limits, if needed

Another important issue regarding solar panel insurance is that there may be no claim limit involved. A claim limit is the maximum amount paid out for a loss that your insurance policy covers. This is different from coverage on structures that are clearly separated from the house, such as a storage shed or gazebo, where the claim limit may be 10% of the dwelling limit.

For homeowners with solar panels, that’s a big positive. At the same time, it’s important to check the details of your policy to confirm you have enough coverage to pay for repairs or replacement of your home including the cost of the solar panel system. You should also be aware of any deductible amount you’ll need to pay before coverage is activated. If you feel you’d like to raise your coverage limit, consult your agent to adjust your policy.

Know whether you need a separate policy

Most rooftop solar energy systems are covered by standard homeowners policies, which doesn’t change your insurance plan. However, you may need to increase the amount of coverage on your home to account for the cost of the system which can then raise your premium. Of course, not every policy or solar energy system is the same. 

Certain systems, such as solar panel carports or ground-mounted panels, may require an add-on or separate policy. Whether or not these different types of systems are covered depends on your policy type. If your system is large enough to merit its own coverage, you may qualify for a separate policy or add-on rider to your current policy.

Solar panel systems can be an excellent investment, reducing your electricity bill while increasing the value of your home. Protecting that investment with the proper homeowners insurance can help ensure you’re covered if the unexpected happens.