Will I have to increase my homeowner’s insurance for solar panels?
Many homeowners are curious to know if their their insurance costs will increase for solar panel installation. Some wonder if the increased insurance costs might offset the savings they would see in their electrical costs. Here is a good analysis on whether solar panels will end up costing you more money than you expected.
Most homeowner’s insurance policies already cover solar panels.
Since solar panels are usually attached directly to a home, most policies do not require an additional premium or an extra rider. Your insurance company does require an additional rider, the increased price may be very minimal. One property/casualty insurance agent in Kansas City said it only costs one of their clients an additional $3/mo to add solar panels to their policy. This is negligible compared to the savings you’ll receive from solar.
Ground mounted systems or panels on accessory buildings might need more coverage.
If you mount your panels on the ground or on a barn or shed, you might want to think about getting more coverage. Some homeowner’s policies have a limit on how much they will cover those structures. Frequently, this number is 10% of the claim limit for the house. Thus, if you purchase a separately mounted system worth more than 10% of the home value, consider getting more coverage.
Systems larger than 10kW require liability insurance for most power companies.
In the paper work most electric companies use (the interconnection agreement) certain requirements are laid out for increased liability insurance. Most of these interconnection documents require you to have a liability insurance policy of $100,000 or more if you install a solar panel system with a power rating of 10kW or more. This covers injury or death on behalf of power company employees. Most homeowner’s insurance policies come with at least this much liability insurance already included. If you need additional coverage, one property and casualty insurance agent notified me that you can get a liability umbrella policy. This would cover your house, cars, and solar panels, for a very affordable price (in his example, less than $100/year).
Conclusion
So, it can be a relief to know that your solar panels will result in no increase, or a very negligible increase in the cost of your homeowner’s insurance. This means that the savings from solar are still worth it. Want to talk to a Kansas City area agent directly? Email us at [email protected] and we can put you in touch with a local expert.