Do I Need Solar Panel Insurance Coverage?

Powering your home with the sun's energy saves you on utility bills, but you invest significantly into the equipment initially to harness that energy. Making sure you have proper insurance on your solar panels protects you financially if something happens to the equipment.

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How (and Why) Do People Insure Solar Panels?

Solar panels that are installed on your home's roof are typically covered by your existing homeowners insurance policy. Once they're installed, the panels are considered a permanent part of your home's structure and accordingly are included in your policy. You may need to increase the limits for the existing policy to cover the panels sufficiently because they'll increase the value of your home.

Some types of solar installations, such as ground panels or solar carports, often don't fall under a regular homeowners insurance policy. You'll need separate solar panel insurance coverage in those situations. Your current insurance company might offer an add-on option to protect the installation.

Regardless of how you insure your solar panels, having adequate financial protection is essential should the equipment become damaged. According to data from HomeGuide, installing solar panels typically costs between $12,600 and $31,500 (CAD 17,951 and CAD 44,878) after the federal tax credit. Because the panels are outdoors, they're susceptible to damage from the elements or human interference. If you don't have insurance on the equipment, you could lose that investment if your panels are stolen, vandalized or damaged by perils included in the policy. There may be exclusions on what's covered with any solar panel insurance policy, but having a policy in place helps pay for the repairs if the issue is caused by a peril that falls under the policy.

Solar panel insurance coverage may also provide liability coverage in case there's an accident involving the equipment. For instance, if a solar panel falls off your house and causes property damage or injuries, the liability portion of the solar panel insurance pays for the costs associated with the incident.

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Will My Homeowner's Insurance Go Up If I Put Solar Panels on My Roof?

If the equipment falls under your regular homeowners insurance policy, it typically won't cause the premiums to increase automatically. However, if you need to increase the plan limits to cover the new solar equipment, you can expect your premiums to increase. Homeowners insurance premiums are calculated using several factors, but the amount of coverage you have has a major influence on how much you pay each month.

The only way to know for sure what will happen with your current insurance policy is to talk to your agent. They can tell you if you need to increase your policy limits or add a rider for the panels, both of which would likely increase your premiums. Your agent can also give you a quote to help you understand how much the policy rate will increase.

Do I Need Solar Insurance?

Your solar equipment should have insurance to protect its value should anything happen to it. It's also a good idea to protect yourself financially by verifying that you have liability insurance associated with the panels. Start by finding out if your current homeowners policy extends coverage to your solar panels. If it does, decide if you want to increase the policy limit to protect the value of the panels fully. If you don't have coverage from your homeowners policy, you may want to start a separate solar insurance policy.

However, if you lease the solar panels, you shouldn't need to insure the equipment, and your homeowners policy probably won't cover them. The company leasing the panels is typically responsible for insuring the equipment. It'll also handle maintenance and repairs, so you won't be responsible for the costs of any damages or repairs. Review the terms with the leasing company to make sure you understand your obligations.