Homeowners’ Insurance and Solar Panels

Learn how solar panels affect homeowners’ insurance, from boosting coverage to finding ‘solar-friendly’ policies that protect your home and investment.

An important consideration is how solar panels might affect your homeowners’ insurance. It’s a practical but often overlooked step in protecting your home and investment. Let’s break it down with no fluff, so you’re prepared to make the switch.

How Solar Panels are Insured, in a Nutshell

When you own a solar system—whether purchased outright or financed—you’re responsible for insuring it. Leased systems are typically covered by the provider, but for ownership, it’s up to you.

Here’s what your installer will cover:

  1. Workmanship – Installation-related issues.
  2. Roof Penetration – Protection for roof modifications.
  3. Equipment – Warranties on panels, inverters, and more (often 10-25 years).

But damages caused by weather, theft, or vandalism? That’s where your Homeowners’ Insurance (HOI) comes into play.

Homeowners’ Insurance and Solar Panels

If you find that you need to add coverage for your solar panel system to protect against any unforeseen damage outside of your control, you will likely have to include it in your HOI policy. To do this, reach out directly to your HOI company and ask how they would like you to do it.

There are 2 major ways for an HOI company to provide such protections: one “solar-friendly” way, and one “solar-antagonist” way. We’ll cover both in detail below. You’ll want your HOI company to utilize the “solar-friendly” way; if they can’t, we at Spartan Solar have resources available for you in order to avoid an unpleasant HOI experience when you go solar.

Insurance Policies: The Good and the Not-So-Good

“Solar-Friendly” Homeowners’ Insurance Policies

If your HOI company is “solar-friendly” and allows for easy integration of a solar panel system into your HOI policy, this is how they will likely do it:

Step 1)

  • Identify the “package price” of the entire solar panel system. This can be easily found in the installation agreement and will be used by the HOI company to price coverage.

Step 2)

  • Increase the home’s “dwelling” coverage amount by the package price of the solar panel system.

Example:

  • Home A has $400,000 of Dwelling Coverage.
  • Home A acquires a solar panel system with a total package price of $30,000
  • Home A’s Dwelling Coverage is increased to $430,000 and the system and home are now fully insured

This exact example just happened to me in my own home, and my insurance premium only increased by $5 per month - well worth it considering my new system is saving me over $600 every year on my electric bill!

“Solar-Antagonist” Homeowners’ Insurance Policies

If your HOI company is not solar friendly, they may use the following process instead:

  • Appraise total package price using a Fair Market Value (FMV) appraisal. This number is usually higher than the package price in the agreement.
  • Write a new line of coverage specifically for the solar panel system into your HOI.
  • Grossly overestimate the liability associated with a solar panel install.

Using this strategy, HOI companies can get away with increasing their premium by up to $1,000 or more annually just because their client went solar!

To Wrap it up...

How to Stay Ahead of the Game

Here’s your to-do list for a smooth insurance experience:

  1. Call Your HOI Provider – Ask how they handle solar systems.
  2. Shop for Solar-Savvy Insurers – Not all policies are created equal.
  3. Consult an Expert – Spartan Solar can connect you with trusted insurance providers to keep your costs reasonable.

Why the Investment Pays Off

Even with a small premium increase, solar is worth it. The savings on your energy bills can far outweigh the added insurance cost.

For example, a $5 monthly premium increase is nothing compared to $600+ in annual electricity savings. That’s money back in your pocket.

Ready to Power Your Home with Solar?
If you’re ready to explore how solar energy can work for your home, we’d love to help you make the switch. Whether you’re just starting to learn about solar or are ready to take the next step, give us a call. We’re here to answer any questions and guide you through the process of going solar, from understanding your options to installation. Reach out today and see how easy it can be to power your home with clean, affordable energy.
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