Will Homeowners Insurance Cover My Solar Panels?

Posted October 5th, 2017 by Alexa Goyette

An increasing number of Americans are purchasing solar panels for their homes and environmental reasons have contributed to this choice. The other convincing reason Americans are relying on solar energy is to save money. Over the course of 20 years, homeowners using solar energy save $56,000 in New York, $63,000 in Boston, and $90,000 in Los Angeles on average. Saving money while saving the planet seems like a convincing deal.

According to the Solar Energy Industries Association (SEIC), California ranks first when it comes to solar energy; the natural energy produced in the Golden State can power 3.7 million homes. Other states, like New York and Massachusetts, are catching up. Others, including North Carolina and Kentucky, prohibit the practice of solar leasing.

Though a lot of people have invested in solar panels, others are on the fence. The potential savings one can make in 20 years is significant, but purchasing panels is expensive in the first place. And what happens if poor weather conditions destroy or damage them? Are these solar panels considered part of the home or are they considered an external object, like sheds and fences?

Solar panels are considered a permanent attachment, so they are considered part of the home in the eyes of insurance companies. In other words, your insurance companies will cover damaged or destroyed solar panels. In instances in which other parts of your home (such as your roof or the structure) would receive coverage, including fire, hurricane, theft, etc., you will receive coverage from your homeowners insurance policy.

While solar panels are covered by your homeowners insurance policy, don't make the mistake of purchasing a small amount of coverage. Solar panels can be extremely costly to replace out of pocket, at an average of $16,800 before tax credits. Even though your homeowners insurance will cover any damages that occur, if your claim limit falls short of the costs to repair or replace your solar panels, you'll have to pay this extra amount.

After installing solar panels onto your home, you might have to add extra coverage to your current homeowners policy or shop for a new insurance company. If you are on the market for solar panels, you might want to plan ahead to make sure your claim limits are raised to accommodate this new feature. Once everything is in order, sit back and wait as you reap the benefits of solar energy: saving money and helping the planet.