Are solar panels covered by homeowners insurance?
Last updated: January 1
Some homeowners are warming up to the idea of generating at least some of their electricity though the use of solar panels. According to the Solar Energy Industries Association (SEIA), nearly 784,000 U.S. homes and businesses had installed solar technology as of mid-2015. If you are thinking of adding solar panels to your home, you might be wondering whether homeowners insurance may help protect them.
Residential solar energy installations are typically covered as part of a standard homeowners policy, according the U.S. Department of Energy's National Renewable Energy Laboratory (NREL). Homeowners insurance typically offers protection against certain risks — often called perils — such as theft or damage from wind or fire.
Check with your agent to learn whether your policy provides coverage and to discuss any variables — for instance, roof-mounted vs. ground-mounted panels — that may affect your coverage.
How much coverage do I have?
If your homeowners insurance does provide protection for solar panels, you may want to review your coverage limits. A limit is the maximum amount your policy will pay toward a covered loss. Also, keep in mind that you'll likely need to pay your deductible before any coverage kicks in to help cover a loss.
Solar panels can be a big financial investment, and you'll likely want to make sure your policy offers enough coverage to help pay for repairs should the unexpected occur. Your agent can help review your existing coverage so you can decide whether you want to make any adjustments.
What else should I know?
If you're interested in joining the ranks of homeowners generating power from the sun, there are some other things you may want to consider first. The NREL suggests you find out whether your town or homeowners association have any restrictions when it comes to solar energy. You'll want to make sure you follow any required steps, such as obtaining permits and following your municipality's codes.
By taking certain precautions before you install solar panels, you can help ensure that you've covered your bases before you begin to reap the benefits that may result from solar-generated energy.