Does Homeowner’s Insurance Cover Solar Panel Windstorm Damage?

Residential solar panels have seen a recent surge in popularity, as more people consider the impact of their personal energy consumption on the planet. Long term, installation can help reduce your electricity bill and carbon footprint at home.

Yet solar panels are not a set-it-and-forget-it solution. You will need to update your carrier regarding the new addition to your property. It’s also important to understand what types of damage will be covered and under which circumstances.

Particularly when it comes to windstorms, you may find standard homeowner’s coverage (also known as HO3) only applies to select locations and perils.

General Considerations

The cost of installing solar panels, also known as photovoltaic systems, typically ranges from $15,000 to $25,000. They’re a considerable investment but one you should recoup over time, as long as you maintain your system and support it with adequate insurance coverage.

Where you install the system matters in terms of how much coverage you will receive for included perils. Specifically, your carrier considers roof-mounted panels as part of your home and includes them in dwelling coverage.

You may want to install solar panels on top of a shed, in a wide-open area of land or a carport but your carrier classifies these as outside structures. Coverage extended to these “other” structures tends to be less or your carrier may require you to purchase a rider.

Outside structure coverage for a standard homeowner’s policy is typically 10 percent of the primary dwelling’s value. This single amount encompasses all secondary structures across your property, from garages and sheds to barns.

Before you commit to purchasing solar panels, review your policy to understand which perils are covered and how they apply to both roof-mounted and outside structure systems. Once you have these factors worked out, contact your insurance carrier to raise coverage limits to factor in the replacement cost of solar panels.

Solar Panels and Windstorms

For properties near the coast, windstorms are often excluded and you may be expected to add an endorsement to your policy or purchase separate coverage. Your policy may also exclude hail damage, based on the vulnerability of roof-mounted panels.

Unless you live in a coastal area or region prone to hurricanes and tornados, a standard HO3 policy will cover windstorm damage to solar panels. Along with location, coverage may not extend to windstorm damage affecting:

  • Electrical components and gear used to connect or hook up the panels
  • Any rented or leased solar panels
  • Defective, poorly maintained or improperly installed solar panels

In general, coverage for windstorms applies to your main dwelling, as well as any attached or secondary structure. Should damage occur to your solar panels, your carrier will pay you for repairs or replacement in cash value, rather than replacement cost. As you research installing a photovoltaic system, discuss homeowner’s insurance with your agent at HUB/Ion Insurance. To understand what your policy covers, add a rider or increase existing limits, contact us today.