Do Solar Panels Affect Home Insurance Rates?

You already know the benefits of switching to solar energy for the environment and your budget. Once you’ve made the decision that this investment is worth it to you, then you need to take time to consider how you will protect your new solar panels. Will they be covered by your home insurance, and will it affect your rates? 


Before you invest in solar panels, it’s best to explore this topic in greater detail with your policy so that you can anticipate any changes to your monthly expenses. Here is everything you need to know about solar panels and home insurance: 

Are Solar Panels Covered By Home Insurance? 


If you are worried about how you will protect your solar panels, there’s good news for you. Your new panels are likely covered by your homeowner’s insurance because they’re attached to your home. As long as they’re damaged by a covered peril, then you should receive the coverage that you have come to expect from your policy. 


Covered perils are a specific type of damage that’s covered by your home insurance. For example, fire is often considered a covered peril where your insurance policy would cover the cost of repairing or replacing your solar panels. 


There are limits to what covered perils will encompass, though. Many homeowners are dismayed to discover that their insurance policy doesn’t cover wear and tear from general use. They also don’t cover damage that results from an earthquake or a flood unless you have these specific types of insurance on your home. 

Do Solar Panels Increase Your Home Insurance Rates? 


Now that you know solar panels are covered by home insurance, you might be wondering what it will do to your rates. Well, solar panels are likely to cause your home insurance premium to jump up, at least by a little bit. You’ll be saving money on the cost of your electricity bill every month, but you may be paying more to insure your home. 


Why do insurance companies charge more for making this improvement to your home


In most cases, it relates to the value of your home. Your policy is designed to cover the repair or replacement of your home under certain conditions. When you add solar panels to the property, you’re increasing the value of your home. Because your home will now cost more to replace or repair, the cost of your monthly insurance premium is likely to rise. 


But this doesn’t have to be a bad thing. You may find that the rate increases are modest, depending on the overall value of your property. If you were to sell the house in the future, you’d earn more money because of the solar investment on your property. 

How Much Will Solar Panels Cost on My Insurance? 


Knowing that your solar panels are bound to add to the overall value of your home, how much can you reasonably expect your homeowner’s insurance rates to rise? You have to consider the overall cost of your new solar system before contacting your insurance company.


For the most part, solar panels will add around $10,000 to $15,000 to the value of your home. All you need to do is increase the coverage of your current home slightly to account for this increase in the value of the home. 


While $15,000 is certainly a lot of money, the amount your insurance will go up should be relatively minimal. 


Depending on your policy, you may even find that solar panels don’t raise the cost of insurance at all. It depends on how much your solar system would cost to repair or replace and whether it fits into the replacement cost of your home’s coverage at the moment. 


This applies to solar panels attached to the roof. You may be required to keep a separate policy if your solar panels are not directly attached to the house, such as ground-mounted systems. 

Do I Have To Tell My Insurance Company About Solar Panels? 


Knowing that your rates are likely to increase with the addition of solar panels, homeowners often wonder if they should simply refrain from telling their insurance company about this upgrade. We recommend that you let your insurance company know as soon as possible so that they can offer you the policy that provides the best level of protection for your home. 


They can help you figure out if you need to re-rate your policy for additional coverage if you want your solar panels to be covered in the event of peril like a fire. 


You may have the option to decline coverage on your solar panels in an attempt to keep your monthly costs as low as possible. If you are interested in this option, it’s best to explore coverage with your provider. By not insuring your solar panels, you run the risk of losing the money that you invested in them when fire, hail, or other covered perils arise. 


Before you make any major decisions about your solar panels, you should always consult with your insurance company to learn the finer points of your protection under your home insurance policy. 


Even if you believe that you would like to decline the additional coverage on the investment, you should know whether that is truly going to be an option for you, or you might want to shop around to find the best rates on a new policy. 

What If I Lease the Solar Panels?


Some homeowners can’t afford the initial outlay of cash associated with purchasing solar panels outright. If you decide to lease the solar panels, there is good news for your home insurance policy. Because you don’t technically own these panels, you may not see a rate increase after the installation. 


Of course, there are other risks that you might want to consider when leasing your solar panels. Check with your solar energy company to ensure that they offer protection for covered perils. If they don’t provide this type of coverage for your leased panels, then you might need to purchase a separate policy that will cover them. 


A separate policy that covers only the solar panels shouldn’t break the budget, especially considering the money you’ll save by not having an electricity bill every month. It offers you peace of mind and protects your investment in your home. This is often money well spent!

Add-on Insurance Policies


There are times when it might not be ideal for your solar panels to be mounted to the roof of your home. When this is the case, they may not be covered by your home insurance policy if they aren’t a permanent fixture on your home. Instead, the insurance company might provide you the option to purchase an add-on policy that will cover these types of ground-mounted solar panels. 


Even though they’re not attached to your home, these panels are still incredibly valuable. It’s in your best interest to make sure they’re covered by some type of insurance policy in case of extreme weather or other covered perils.  

Damage During Installation


If you are installing your solar panels on the roof of your home, then you should know that you could be taking a big risk when it comes to potential damage to the roof. Hiring an unqualified contractor who doesn’t understand the finer points of installing solar panels can cause serious damage to your home. That damage may not be covered by your insurance policy. 


Make sure that you check with the installer in advance to know whether any potential damages to the roof are going to be covered by insurance. 


An insurance policy that doesn’t cover this type of damage should prompt you to have an in-depth conversation with your contractor. Many times, they will provide a workmanship warranty in the event that something goes awry during the installation process. If they are experienced in this type of work, the risk of damage to your roof will be minimal. 


Always be sure to check with previous customers and to read reviews to determine whether you feel that this installer is going to be the right fit for you. 

Contacting the Experts


If you’re serious about Winnipeg solar, then you should contact the professionals. At Powertec Solar, we believe in producing quality work and protecting your home from damage. When you’re ready to start discussing what solar panels will look like for your home, give us a call for a consultation! We offer a free solar energy feasibility analysis for your property.