Does my homeowners insurance cover solar panels?

Key points

• Standard homeowners insurance typically covers residential solar panels against certain risks (fire, wind, theft) though coverage can vary by insurer and installation type.
• Homeowners should verify coverage details, limits, and deductibles with their insurer; leased panels are insured by the leasing company.
• Coverage limits may need adjustment due to the high cost of solar panels.
• Local regulations, HOA rules, permits, and municipal codes should be checked before installation.

Some homeowners are warming up to the idea of generating at least some of their electricity through the use of solar panels. According to the Solar Energy Industries Association (SEIA),), there are 6,102,509 solar energy systems installed in the United States. 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 insurance provider 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.

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. And if your solar panels are leased, the solar panel leasing company owns them, and they must maintain and insure them.

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 insurance provider can help review your existing coverage so you can decide whether you want to make any adjustments.