Will Solar Panels Increase Homeowners Insurance Premiums?

The answer depends on the insurance company. Some homeowners insurance providers increase premiums when a policyholder adds solar panels. Others raise premiums indirectly: the solar panels increase the home’s value, so premiums increase accordingly. Other companies refuse to cover solar panels or cancel policies because of solar pane additions.

The impact of solar panels on homeowners insurance has become a predominant issue, with many Americans seeking green energy solutions for their homes and energy independence. Solar panels allow homeowners to provide their electricity while reducing their carbon footprint. But how homeowners insurance companies treat solar panels remains a muddle.

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When deciding whether to install solar panels or buy a home with existing solar energy, it’s essential to understand the impact on homeowner’s insurance. The panels themselves are valuable, so you want to ensure that your insurer pays for damage to these assets. Companies that provide coverage for solar panels offer it based on covered perils. So if your panels are damaged or destroyed by specific events, your insurer takes responsibility. Covered risks include storms, fires, theft, and vandalism.

Additional Liability

If your insurer covers solar panels, they create additional liability on your policy. Before having them installed, check with your home insurance company to find out their coverage policy. Some insurance companies have already factored green energy technology in their rates, so your solar panels will have little impact. Others view them as a separate liability requiring additional premiums. In those cases, premium increases of over $1,000 are possible.

Canceled Policies

Though many insurers cover solar panels, albeit, at an increased premium, some refuse to cover them. When solar panels are excluded, the insurance company may write the solar panels out of the policy, so your home is still covered, but damage to the solar panels remains at your own expense. 

Alternatively, some homeowners insurance companies cancel policies altogether because of solar panel installation. Before installing panels or other green energy technology in your home, make sure to understand the insurance implications. You may need to change insurers, and the new company’s premiums may be substantially higher.

Shop Around

If your insurer declines to cover solar panels or charges exorbitant premiums, you may be surprised to find much better deals available from competitors. Some insurance companies even provide discounts to policyholders who install green technology because they understand these improvements increase the home’s value at resale.

However, bear in mind that your home’s location impacts premiums. For example, if you live in an area where solar panels are unlikely to sustain damage, the cost increases may be modest. However, a home located in an area known for violent weather increases the chances of rooftop solar panels suffering damage from wind, lightning, hail, or rain. As a result, premiums may increase substantially.

Cost Analysis

Ultimately, homeowners must determine if solar panels are within their budgets and worth the price. In addition to increased insurance premiums, installation costs can be high. Despite this, many homeowners find that the benefits of solar panels make the price worth it in the long run.

Rented Solar Panels

Some solar companies provide solar panels at a monthly rental price. In these cases, the homeowners need not worry about insuring them. It remains up to the panel provider to maintain an insurance policy.

Solar panels provide benefits both to the environment and the pocketbook. If installing or purchasing a property with solar panels makes sense for your personal situation, chances are you can find insurance for them at a reasonable price; however, since not all insurers cover them, you may need to shop around to find coverage at an affordable premium.

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