In Spartan Solar’s home state of Florida, more homeowners are considering solar panel installations. Because of this, the question of how a homeowners’ insurance (HOI) will respond is becoming all the more common. While this is a more frequent question in solar-friendly states like Florida, it’s a consideration every prospective solar owner should understand. Let’s explore how installing solar panels may affect your HOI policy and the steps you can take to ensure proper coverage, courtesy of Spartan.
The Basics of Solar Panel Insurance
When homeowners install solar panels, they typically own the system outright, either through traditional financing or an upfront purchase. This ownership places the responsibility for insuring and monitoring the system on the homeowner. For those who opt for alternatives like leases or power purchase agreements (PPAs), insurance provisions may differ. Here, we’ll focus on scenarios involving solar ownership.
Reputable solar installation companies usually offer warranties in three key areas:
- Workmanship – Covers installation-related issues.
- Roof Penetration – Protects against damage caused by roof penetrations.
- Equipment – Includes panels, inverters, and related components.
These protections typically last 10 to 25 years, depending on the agreement. However, they rarely extend to damages from “acts of God” (e.g., severe weather), theft, or vandalism. This is where your homeowners’ insurance comes into play.
How Solar Panels Are Covered Under Homeowners’ Insurance
To safeguard your solar panels against unforeseen damage, you’ll likely need to adjust your homeowners’ insurance policy. This often requires contacting your insurance provider to add coverage for the system. Insurance companies approach solar panel coverage in two main ways:
- Solar-Friendly Policies
- Solar-Antagonist Policies
Solar-Friendly Policies: A Seamless Integration
If your insurance company supports solar panel integration, they’ll likely follow these steps:
- Determine System Value
Your system’s total cost, as stated in the installation agreement, will be used to calculate the coverage amount. - Increase Dwelling Coverage
The value of your solar system will be added to your home’s existing dwelling coverage.
Example
- Home A has $400,000 in dwelling coverage.
- The homeowner installs a $30,000 solar panel system.
- Dwelling coverage increases to $430,000, fully insuring both the home and the solar system.
This approach is highly cost-efficient. An average panel system that saves $600 annually on electricity costs will increase the HOI policy by a mere $5/month in the state of Florida.
Solar-Antagonist Policies: A More Challenging Approach
Some insurance companies may not readily accommodate solar panels. Their process often looks like:
- Fair Market Value (FMV) Appraisal
Instead of relying on your installation agreement, they appraise the system at a higher FMV. - New Line of Coverage
The solar system is added as a separate line item in your policy, rather than increasing dwelling coverage. - Overestimating Liability
These companies may inflate perceived risks associated with solar panels, leading to unnecessarily high premiums.
This method can result in premium increases of $1,000 or more annually—far exceeding any reasonable adjustment for solar coverage.
How to Navigate Insurance Challenges When Going Solar
Choosing the right insurance policy is crucial to maximizing your solar investment. If your current provider complicates the process or imposes excessive costs, consider seeking guidance. Spartan Solar specializes in helping homeowners navigate these challenges by providing clear, actionable solutions.
Contact us today, and let’s make solar work for you—seamlessly and securely.
Spartan Solar
https://gosolar.spartansolar.earth/
Published by Charlie N.