Thanks to improvements in solar panel efficiency, even Americans who don’t reside in sunny states like California and Florida can now substantially reduce their energy bill by going solar.
But that raises the question of how transitioning to clean and renewable solar energy will affect your homeowner’s insurance.
The good news is that the dwelling portion of a homeowner’s policy covers any attached structures.
That means that rooftop solar systems are automatically covered by home insurance.
There are, however, a few caveats of which you ought to be aware.
Covered perils
First, you can only file a claim if your panels are damaged by a "covered peril."
Covered perils are just the types of damage specified as covered by your insurance policy.
For example, fire and vandalism are typically covered by homeowners’ insurance. So, your home policy will cover your solar panels from either of those types of damage.
Since wear and tear aren’t covered by homeowner’s insurance, you won’t be reimbursed for any damage that’s merely a consequence of normal usage.
One good thing about solar energy, however, is that there are literally no moving parts. That means that if they aren’t subjected to fire or some other extraordinary event, your solar panels should function problem-free for their entire 25-to-30-year expected life.
Will my rates increase?
It’s possible that installing a rooftop solar system will mean a slight rate increase.
That’s because your insurance rate is partly determined by the value of your home. And one of the perks of going solar is that it’s almost certain to make your home more valuable.
According to research by the real estate marketing firm, Zillow, installing a solar system boosts the average Pennsylvania home’s value by 4.9%.
That puts PA among the top two states for increased solar property values. (In case you’re curious, New Jersey tops the list.) But it also means that Pennsylvania residents can expect a slight rate increase when they install a rooftop system.
Should I increase coverage?
Though rooftop solar systems are typically covered by homeowner’s insurance, if you have one installed you may want to consider increasing your coverage.
Otherwise, your policy limit may not be high enough to cover costs in the event that both your home and solar panels are damaged.
Whether you should increase coverage depends upon several factors, including what sort of damage you’re concerned about and the cost of your solar system.
The good news is that, even if you do decide to increase coverage in the event that both your panels and home are damaged, your premiums probably won’t be affected too significantly.
Ground-mounted panels
Though rooftop systems are the most common, a ground-mounted system can have some advantages if you’ve got the necessary space.
Since there’s no need to haul equipment up or climb onto a roof, labor costs are typically lower.
And, since neither the direction nor angle of your panels is dictated by your roof, ground mounts can be set up optimally for direct sunlight, thereby generating the most possible solar energy and giving you the biggest bang for your buck.
But, since it won’t be attached to your home, choosing a ground-mounted system means that you’ll need a separate policy if you want them covered.
Should I inform my insurance agent?
Absolutely. Reaching out to your insurance agent is always recommended. Installing a solar system isn’t cheap, and you’ll want to ensure you have the proper coverage.