Insurance Issues for Solar Panels
We can all make steps to reduce our carbon footprint and go green to create a sustainable earth. Recycling, saving water, and selecting materials other than paper and plastic are some of the small ways we can help. A more drastic change environmentally conscious people are making is adding solar panels to their homes.
Beyond the renewable energy and pollution free benefits, solar panels also create on-site electricity for an average of 25 years, help reduce electric bills and give your home added value, should you decide to sell in the future.
According to 2018 data, 1.5 million homes in the country are equipped with solar panels. Installation tends to be straightforward and the result can last decades without significant upkeep. Yet, there might come a time when your panels experience some damage. At this point, can you file an insurance claim with your homeowner’s insurance carrier?
Understanding the Basics
Typically, photovoltaic (PV) systems get installed onto your roof, therefore your carrier almost always considers it part of your home. Getting a rider isn’t always necessary, although you may want to extend your coverage limits because of their cost and added value. Most consumers consider all solar panel systems the same, but your insurance carrier doesn’t. Ground-mounted panels and solar carports in particular, aren’t always covered. Depending on the system’s size, it may require a rider or separate policy. Nevertheless, in the process of installing the panels, reach out to your agent or carrier to discuss any changes.
Who Owns the Panels?
Did you buy or lease the solar panels on your roof? Insurance wise, this makes a difference. If you bought the panels, you’re the owner, but if you leased them through or signed a power of purchase agreement (PPA) with a company, they are the owners. Thus, they bear the responsibilities involved in maintenance and insurance.
When it comes to maintenance, panels you bought directly often come with a 25-year warranty. Rather than use your homeowner’s policy right away, check to see if your warranty covers malfunctions and damage before you make repairs.
Raising Coverage Limits
How much did you pay for your solar panels? In 2018, the average homeowner pays nearly $11,000 for a 5-kilowatt system after rebates and tax incentives. If you go with a higher-powered system, expect to pay a higher price. In either case, the solar panels are a major addition to your home. In case of serious damage, it’s better to have enough coverage for replacements and repairs than to find your policy comes up short. To prepare, work with your agent or carrier to adjust your coverage limit and to anticipate potential perils.
Did you recently purchase solar panels? Make sure your homeowner’s insurance offers adequate coverage in the event of damage. To discuss your policy with one of our professionals, give us a call at 203.729.5261.