Liability Insurance for Solar Panels

February 29, 2024

The instantaneous growth of solar energy and the active involvement of private households in this industry is one of the trends of the last 5 years. Every year, more and more homeowners prefer solar panels. As the National Renewable Energy Laboratory states, by the end of 2022, about 3.9 million photovoltaic solar energy systems were installed in residential homes in the USA.

US residental PV Penetration

Source: NREL

What’s the secret behind such popularity? Solar panels have numerous advantages compared to traditional sources of electricity. The most significant ones include energy independence and environmental friendliness.

The owner of a solar power station assumes the risks of damage, destruction, and loss of expensive equipment due to natural disasters, fires, unlawful acts of third parties, etc. To protect their property, insurance companies offer specialized insurance programs. Let’s talk more about this.

Concept and Benefits of Solar Panel Insurance

Installing solar panels is a substantial investment for homeowners in terms of cost and long-term benefits. However, like any valuable asset, solar panels are subject to certain risks that can disrupt functionality and lead to financial losses. This is where solar panels homeowners insurance comes to the rescue.

This type of insurance provides the following benefits:

Protection against physical damageHomeowners insurance covers solar panels from physical damage caused by accidents, extreme weather events, and even theft. Since solar panels are typically installed on the roof, they are susceptible to damage from hail, falling trees, and other unforeseen circumstances. Having home insurance solar panels guarantees that you will be financially protected in case of such incidents.
Liability insuranceIn addition to panel protection, homeowners insurance provides liability coverage in case someone gets injured on your property due to solar panels. The policy protects you from legal and medical expenses associated with such incidents.
Comprehensive property damage coverageHomeowners’ insurance policies often cover not only solar panels but also damage to your property resulting from insured events. For example, if a severe storm damages the roof and solar panels, the insurance policy covers the costs of repairing both.
Increased property valueInstalling solar panels can immensely increase the value of your property. Many insurance companies understand this and provide coverage that considers the increased value of your home due to solar panel installation. Thus, you receive sufficient coverage to protect your investments.

Regarding commercial properties, in addition to these primary protective measures, businesses should also consider the possibility of additional coverage for risks inherent to their operations.

What Risks Does Solar Panels Insurance Cover?

Home insurance with solar panels covers various risks and potential losses that may arise in connection with the installation and operation of solar energy systems:

  • Damage caused by fire resulting from lightning strikes and explosions.
  • Damage caused by natural phenomena: hail, hurricanes, storms, tornadoes, heavy rains, floods, etc.
  • Water damage: due to leaks from the water supply, sewerage, heating, and fire extinguishing systems due to their rupture or overflow, including from adjacent premises.
  • Theft: burglary, robbery, theft with forced entry.
  • Unauthorized third-party behavior: deliberate unlawful behavior aimed at damaging solar system equipment.

Each insurance company may provide different levels of coverage and limitations, so carefully review the insurance terms before purchasing solar panel insurance coverage.

Key Factors When Choosing Residential Solar Panel Insurance

Before purchasing a policy, familiarize yourself with its terms. Pay attention to the following parameters:

Coverage levelThis aspect determines the breadth of risks and potential losses the insurance covers.
Coverage areaIt is important to ensure that the area where solar panels are installed is included in the coverage area of the insurance policy.
DeductibleThis is the amount of money the owner must pay out of pocket before the insurance company begins to pay compensation for the insurance event. Its presence or absence can significantly affect solar insurance costs.
Financial stability of the insurance companyIt is essential to choose an insurer capable of paying compensation in the event of an insurance event. As rated by independent rating agencies, top insurance companies can help assess their financial reliability.
Customer reviewsStudying reviews from other customers can give an idea of the quality of service of the insurance company, its attitude towards customers, and its propensity to pay compensation.

Also, be sure to read the entire contract and familiarize yourself with the list of exclusions.

Home Insurance Costs for Solar Electric

Price will vary depending on the following factors:

  • Cost of solar panels: The price of the solar power system will influence insurance premiums. Insurers consider the initial costs of purchasing and installing the system, and the higher they are, the more expensive the insurance solar panels.
  • Location: Homeowners in areas prone to natural disasters (hurricanes, tornadoes, wildfires), as well as areas with high crime rates, pay higher insurance rates.
  • Coverage type: The level of solar panels insurance coverage you choose will affect your premium. Comprehensive coverage, protecting against a wide range of risks, costs more than minimal insurance.
  • Insurance company policy and discounts: Each insurer sets its policy regarding solar system insurance. Some offer special separate policies for solar panels, while others include coverage in standard home insurance policies. Additionally, some insurers offer discounts on home insurance for solar panels, as they are considered less risky due to reduced electricity costs.
  • Maintenance and security measures: Insurance companies may offer lower premiums for homeowners who provide proper maintenance and security measures for their solar power systems.

It is essential to carefully choose and compare offers from different providers to find the best coverage and terms for your solar power system.

How To Protect Your Solar Power System

Solar system insurance protects you from unexpected expenses that may arise in the event of direct physical damage to solar panels, their structure, and inverters or damage requiring repair or replacement of equipment.

Can you prevent theft or possible damage to your solar panels? Yes, but you need to take some necessary precautions:

  • Maintain your solar power system in good condition by conducting regular checks and maintenance. This will help prevent potential problems and reduce the risk of damage.
  • Install solar panels on a sturdy structure to reduce the risk of damage from extreme weather conditions. Consider installing additional security measures- for instance, surveillance systems – to protect your solar power system from theft and vandalism.
  • Before starting installation, ensure that all system components are undamaged, can be connected, and properly certified.
  • If the solar power system is installed in a commercial building, train your staff in proper equipment handling and safety rules.

Following these tips will help minimize the risks leading to solar panel damage and ensure their reliable protection.

Key Takeaways

Today, solar panels are used in practically every sphere of activity – charging devices, street lights, electric vehicles, and many other areas. Homeowners are increasingly considering solar panel installation insurance.

Solar panels and home insurance are two closely related concepts. Homeowners insurance for solar panels protects your home and the solar installation.

Solar installation insurance provides coverage for various risks that may occur during the installation, operation, and maintenance of solar panels, e.g., fire, hail, hurricanes, theft, etc.

When choosing an insurance policy, carefully review the insurer’s policy and the terms of the policy, i.e., coverage level, limitations, etc. Doing that will help you protect your investments and reduce financial risks associated with unforeseen circumstances.

Frequently Asked Questions

Are solar panels covered by homeowners insurance?

Solar panels are usually included in this policy, but the level of coverage may vary depending on the terms and the insurance provider. Some insurance companies offer additional coverage specifically designed for solar panels.
They aim to protect against risks that may not be covered under your standard insurance policy, such as damage from hail or malfunctions of solar equipment.

What insurance companies cover solar panels?

Many insurance companies offer insurance on solar panels as part of homeowners insurance policies. It is important to research and compare insurance companies to find the best coverage options for your solar panels.

When choosing an insurance provider, consider policy features, coverage limits, deductibles, premiums, and customer service reputation. Be sure to discuss your specific needs with insurance agents. It will allow you to tailor the coverage to protect your solar panels properly.

Do solar panels increase homeowners insurance?

After installing solar panels on the roof of a home, the size of the insurance premium will not increase. However, you will likely need to expand the limits of insurance coverage to account for the cost of replacing solar panels. This, in turn, will lead to an increase in insurance premiums.

How much does solar panel insurance cost?

The cost of homeowners insurance and solar panels will vary for each specific case. This is because the price depends on a number of factors, including the location of the home, the type of solar panels, the size of the installation, the selected coverage options, and the insurance company’s policy.
Prices can vary significantly; we recommend contacting an insurance provider for accurate information.

Is there separate solar panel insurance?

Yes, you can purchase separate insurance for solar panels. This type of insurance is usually provided to deliver additional protection for solar panels against various risks, as well as loss of income in the event of temporary installation downtime (for commercial properties).
Separate insurance for solar panels can be useful in the following cases:
– Standard home insurance does not provide sufficient coverage for solar installations.
– You want a broader range of protection for your solar energy installation.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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