Homeowners Insurance and Solar Panels for Your Home
by Cody McGowan, on Jul 15, 2020 8:09:00 AM
Will Installing a New Solar Panel System Increase Your Home Insurance?
Savvy homeowners often have two concerns when renovating or remodeling their homes. First, will it increase their property value? And second, will it raise their home insurance rates? The first answer is easy when it relates to new solar panels for your home. A solar system invariably increases property values and energy savings for the property owner.
The answer to the second question depends on a homeowner’s existing coverage. Because the solar panel system on your home in Champaign, IL, increases your property values, it may also increase the amount you pay for insurance. Read this blog installment to see if solar panels could impact your home insurance.
When You’re Fully Covered
You installed your solar panel system because it was is a smart environmental and economical choice. The good news is that most insurance companies feel the same way. They consider a new solar power system a valuable addition to your home – requiring no need for special insurance add-ons or increased costs. In fact, most national companies have a lot of experience working with property owners that install new solar systems. If you already have a comprehensive policy, then your monthly premium will likely remain the same.
Some insurance carriers even offer lower rates or discounts for solar system owners. In other cases, there may be a need to include an add-on (or rider) to your existing policy – one that specifically covers the new solar panel system. But this is usually only the case for ground-mounted systems.
When You May See an Insurance Increase
Not all insurance companies are the same, and neither are all insurance policies. Here’s one of the reasons you could see an increase in coverage cost. Let’s say you have a $200,000 homeowner’s policy, and your property is valued around the same amount. If you add a solar system, then the same policy will not be enough to cover it. So, your insurance provider would need to modify the policy and increase the premium to cover the system. The same is true, as mentioned earlier, for ground-mounted systems. Since they are not a part of your home but a separate structure, they’d probably need extra insurance.
As a rule of thumb, you shouldn’t expect to see an increase of more than $10 a month. Still, the best thing to do if you are considering solar panels is to speak with your insurance agent. They can tell you if your premium will increase. Also, the team at Summit Solar can provide general guidance if you have questions too.
Pro-Tip: What to Do If There Is an Increase
The truth is this: Insurance companies are in business to make a profit. Unfortunately, sometimes they'll take advantage of uninformed homeowners who are making home improvements, such as solar panel installation. If you see an increase of more than $100 a year, get a second quote. Summit Solar has found that if you shop around, you could find a more affordable price than what you paid before installing solar.
Got questions about solar panel installation and how it affects your homeowners insurance? We’re glad to answer your questions or point you in the right direction. Contact Summit Solar today!