Before diving into the complexities of insurance coverage, it's essential to understand the financial commitment involved in installing a rooftop solar energy system, which oftentimes ranges from $15,000 to $25,000, or go even higher for very large homes or ones that include a solar backup battery. Protecting this investment against potential damage from storms or other unforeseen events is a crucial consideration for homeowners.
An important consideration for insurance is that laws and regulations are largely determined on a state-by-state basis. Although this article looks at the most common policies for the U.S., it should not be seen as comprehensive. Your state and your specific policy may vary significantly from this discussion, and you should review your policy with your agent before making any investments in a solar energy system.
Fortunately, most homeowners' insurance policies include coverage for solar energy systems. These systems, including rooftop panels or tiles, are typically considered permanent attachments to the property, similar to a patio or security system. However, it's crucial to be aware that certain policies may exclude damage caused by specific threats, such as wind. Coastal states, in particular, and those that have regulations focused on hurricanes, have specific regulations around wind damage. Similarly, earthquake-prone areas may require separate earthquake insurance to safeguard the solar panel system.
One positive aspect for homeowners with solar panels is that there may be no claim limit involved. Unlike structures separate from the house, where claim limits may apply, solar panel systems are usually considered part of the main structure of the home. Homeowners should review their policies to ensure sufficient coverage for potential repairs or replacements, considering both the home and the solar panel system.
While standard homeowners' policies often cover rooftop solar energy systems, it's important to evaluate whether additional coverage or adjustments are necessary. Certain systems, like solar panel carports or ground-mounted panels, may require separate policies or add-ons to the existing policy. Homeowners should consult with their insurance agents to determine the appropriate level of coverage based on their specific system and needs.
For those who lease their solar panels or participate in Power Purchase Agreements (PPAs), responsibility for damage and maintenance typically falls on the third party owning the system. In such cases, homeowners should engage with their lease or PPA providers to clarify coverage details.
Solar panel systems are a substantial investment that can reduce electricity bills and increase home value. To ensure comprehensive protection, homeowners should understand the perils covered by their insurance providers. Common hazards, such as fire, lightning strikes, vandalism, and theft, are generally covered, but it's crucial to confirm specific coverage with the insurance company.
More and more, solar energy systems are becoming complex, multi-faceted systems. As electric vehicles (EVs) gain popularity, the need for home charging stations has risen. Homeowners considering installing charging stations should be aware of their insurance obligations to protect these valuable assets.
The JD Power U.S. Electric Vehicle Experience (EVX) Home Charging Study reveals that 80% of EV drivers charge their cars at home. While homeowners' insurance for charging stations is optional in some states, California and Oregon mandate homeowners liability insurance coverage for these stations. This coverage protects against damages caused by electrical issues, such as events like fires, and potential liability for damages to neighboring homes.
Determining coverage for EV chargers involves understanding the interaction between car and home insurance. In some cases, the EV charger and cord may be considered extensions of the car and covered by comprehensive auto insurance, especially for portable chargers that can be used outside the home. Home insurance may come into play if damages are due to specific conditions in the home, such as electrical problems.
Another major investment solar customers often consider is a whole-home solar backup battery, such as the Tesla Powerwall or Enphase’s IQ battery system. More than just backup for when the grid goes down, these components are becoming essential to maximizing the value of home energy systems in the era of NEM 3.0 in California and Time-Of-Use rates throughout the country. By allowing homeowners to store inexpensive mid-day solar energy and use it during expensive peak times, they can pay for themselves quickly.
“Generally speaking,” Neil Dobbs, an independent agent in Decatur, Georgia said, “Solar backup batteries are considered part of your home’s energy system and do not require specific policy riders. They can represent a significant increase in the value of the home and the policy should be adjusted if that’s the case.”
Installing solar panels, backup batteries, and EV charging stations represents a commitment to sustainable living and reducing environmental impact. However, homeowners must navigate the complexities of insurance coverage to safeguard these investments. Reviewing existing policies, considering additional coverage, and understanding the specific risks involved are crucial steps in ensuring financial security while harnessing the power of renewable energy. As the landscape of clean energy evolves, so too must homeowners' approaches to insurance coverage to keep pace with changing technologies and risks.