We see many people adding solar panels to their homes these days. I thought it would be good to look at this from an insurance perspective. I am very familiar with the solar power thought process, having made lots of solar panels over 30 years ago for people, when I owned a glass company. Most of what was accomplished with the panels in those days was heating of water for household use. Creating actual electric power at the home level was not a thought that had viability. Storage was the issue then, as the power companies saw it as a fad and really didn’t embrace it. They certainly didn’t see themselves buying power from homeowners and reselling it.
How do insurance companies view solar panels on your home?
There are many unknowns about this industry that have not really been addressed by the insurance companies and the way they should be reacting to their presence on our homes.
The addition of solar panels to our home is seen, by the insurance companies, much like adding a room or garage. It adds value to our home but, this one creates some challenges from an insurability perspective. Some concerns are: Are the panels secured in such a way as to weaken the structure of the roof or the shingles. What effective is the actual installation having on the shingles, is it lessening their longevity is it creating the possibility for leakage. If there is a future claim that may be a legitimate claim on the shingles, who pays to have the panels removed while the roofing is repaired. If the panels blow off, who is responsible for the panels and also the roof or roofing. Liabilities during installation.
Currently the approved process starts by choosing a licensed and insured company, both to buy from and to do the installation. CHECK THEM BOTH CAREFULLY, off times these kinds of new things brings out the crooks. Just because they tell you all the stuff you want to hear, doesn’t mean it’s really true. Check with the city and state to check contractor and business licensing, call their insurance company or at least ask to see declaration pages of their liability and workers compensation coverage. Your ability to seek help A fall from the roof by an installer could become your problem! Remember treat it like you would if you were adding a room to your home or building a $20,000 – $40,000 garage or shop.
What to do: Notify your insurance company of the addition of the panels and the cost of the work. Currently, they should just add this value to the Dwelling A amount and make a record of the change to your investment on the policy and / or with the insuring companies underwriting.
I foresee an endorsement or something that will tidy up all the coverage questions and concerns that will make this all a lot less open for opinions and loopholes on both sides.
Michael W Berg provides insurance coverage for his clients in Bountiful, Centerville, Farmington as well as the whole state of Utah. For more information on insurance click here!