Are Solar Panels Covered by Home Insurance?

The rise of renewable energy solutions has led more homeowners to invest in solar power, but a common question remains: Are solar panels covered by home insurance? Understanding how insurers classify solar panels and what risks they cover is crucial for homeowners looking to protect their investments.

The Growing Role of Solar Energy

Before diving into insurance coverage, let's take a look at some key stats that highlight the rapid expansion of solar power:

Record Growth in U.S. Renewable Energy: In 2024, the U.S. added 48.2 gigawatts of capacity from utility-scale solar, wind, and battery storage-a 47% increase from the previous year. This surge is enough to power approximately 3.6 million homes. (The Guardian)

Solar's Growing Share in U.S. Energy Capacity: In 2023, solar power represented approximately 54% of new U.S. electric generation capacity, a significant rise from just 6% in 2010. (NREL)

Decline in Solar Installation Costs: Between 2010 and 2023, the global weighted average levelized cost of energy for concentrating solar power (CSP) fell by 70%, decreasing from $0.39 per kilowatt-hour to under $0.12 per kilowatt-hour. (U.S. Department of Energy)

Insurance Premium Increases for Renewable Energy: Policyholders in the renewable energy sector have experienced premium increases of 20% to 40% compared to the previous year, driven by high costs of claims from natural catastrophes. (Reuters)

Understanding Coverage Limits

While many standard home insurance policies include rooftop solar panels as part of the dwelling coverage, it's not always a straightforward process. Coverage for solar panels is typically included under the home's overall structure, but whether it accounts for all potential risks depends on the insurer. Certain events like hailstorms or electrical surges might require additional riders or endorsements to ensure full protection.

Michael Orefice, SVP of Operations at SmartFinancial (https://smartfinancial.com/), points out:

"Home insurance does not cover water damage from storm-related flooding, so a flood policy must be bought separately for people who live in a flood zone and even those near one. Home insurance also does not cover damage caused by poorly maintained systems, like rusted pipes causing leaks and black mold."

Michael Benoit, Founder and Insurance Expert at ContractorBond (http://contractorbond.org), adds:

"Rooftop solar panels are often part of your homeowner's insurance policy under dwelling coverage, although their supplementary value usually necessitates a coverage modification. I've seen policies exclude things such as hail or electrical surges (both typical hazards for solar systems). If these events cause damage to parts of your system, including inverters or wiring, check to see if the policy covers those as part of the installation."

The Importance of Regular Policy Updates

As homeowners install solar panels and other home upgrades, it's essential to update insurance policies accordingly. The value of the home changes over time, and failing to account for those adjustments can leave homeowners underinsured.

Martin Orefice, CEO of Rent To Own Labs (https://renttoownlabs.com/), emphasizes the importance of proper coverage:

"The most important factor here is making sure you purchase enough coverage to pay for the total value of your property if the worst should happen. Especially as you move further into property ownership, make sure you're updating your policy to cover the actual replacement cost of your property rather than just its market value. You'll also want to consider buying riders for non-covered natural disasters like earthquakes and flooding."

Benoit further explains:

"Be sure to inquire fully into the process of filing claims, particularly if your insurer accepts replacement cost or depreciated value, to avoid unpleasant surprises. Battery modules and ground-mounted panels aren't necessarily treated the same and may not be covered under a standard policy. For instance, in my experience, I've seen customers pay $75-$100 more per year for riders that essentially insure $15,000 battery systems against power surges or equipment malfunctions. Even insurance companies sometimes ask for maintenance logs to support a claim, so I always keep them as detailed as possible."

What Homeowners Should Do Next

For those who have or are considering installing solar panels, the best approach is to contact their insurance provider to confirm coverage specifics. Some key questions to ask include:

Does the policy cover all damage types, including natural disasters and electrical surges?

Are ground-mounted solar panels and battery storage systems included, or do they require additional riders?

Will claims be based on replacement cost or depreciated value?
Are there maintenance log requirements for filing claims?

A proactive approach can help homeowners avoid unexpected financial losses while ensuring that their solar investments remain protected. As solar technology becomes more popular, understanding how insurance policies adapt to these changes will be essential for responsible homeownership.

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This release was published on openPR.