July 12, 2018
Does your solar system need to be insured? The short answer is yes. Installing a solar system is a big investment that will have significant financial returns. It’s critical that your investment is adequately covered in the event it gets damaged and needs to be repaired or replaced.
For that reason, we encourage every one of our customers to have a conversation with their insurance agent before their solar system is installed. Each policy is different and it’s important that you know the details of your coverage limits or if you need to purchase an add-on to properly insure your solar system.
Every construction project has the rare potential to cause property damage, whether the contractor is being diligent or careless. In most cases, your insurance policy would help cover the damage caused by a fire, leakage, or other unfortunate occurrences. Your insurance company would then likely pursue your contractor’s insurance for reimbursement.
It is important to work with qualified solar installers to avoid unnecessary property damage. They are trained to install solar up to current electrical code in the safest way possible. Ask your contractor to provide proof of insurance prior to the start of any work. Most qualified installers will also offer an additional workmanship guarantee that will cover the cost of replacement parts and the time needed for the repairs.
If you own your solar system:
Most insurance policies consider roof-mounted solar systems to be a permanent attachment to your building. Meaning, most policies will cover roof-mounted systems for perils such as wind, fire, and theft without increasing your premiums. Ground mounts and carports may not be covered. Those systems could require an add-on or rider since they aren’t attached to your building.
Even though your system may be covered under your existing policy, you may still need to raise the amount of coverage (the maximum a policy will pay out for damages) to match the increased value of your property. Increasing the coverage will make sure you are adequately reimbursed.
In addition to your insurance coverage, most of your solar system equipment will come with manufacturer warranties ranging from 10 years to 30 years. A qualified solar installer will also provide a workmanship warranty that covers parts and labor, plus the cost of removing, shipping, and reinstalling defective or damaged components. Be sure to examine your solar contract to make sure you understand the warranties and guarantees your installer is including with your project.
If you use a PPA or lease:
Most leased systems and PPA’s would be covered under the system owner’s insurance policy. However, we suggest that you spend time examining the contract to make sure adequate coverage is provided and still have a conversation with your insurance agent.
Every insurance policy is different. We encourage you to have a conversation with your agent to make sure your solar system is properly covered. Don’t assume. It’s critical that you take steps to protect your solar investment from day 1.