So, you’ve decided to install solar panels on your home. You’re not alone. A lot of people in California are installing solar systems. The question is whether or not this affects your homeowners insurance? In most cases the answer is no. There is no special coverage required with regard to solar panels, but it is a good idea to make sure that you have included the cost of the solar panels when evaluating the replacement cost of your home. 

We are aware of cases where the installation of a solar system damaged a roof resulting in a leak.  The result was a huge claim and a major dispute with the insurance carrier. The unendorsed homeowner’s policy is not intended to cover damage from a leaky roof, unless there was damage from an insured peril, like a windstorm. This is a complicated subject and any potential claim should be evaluated on its own merits. For example: there is coverage for damage resulting from the accidental discharge or overflow of water from within a plumbing, heating or air conditioning system, but there is an exclusion for damage resulting from constant or repeated seepage or leakage of water or steam, or the presence of condensation of humidity, moisture or vapor, that occurs over a period of 14 days or more. The point is that there is the potential for a claim and there is the potential for an argument. 

This is why it’s a good idea to have your solar system installed by a licensed and insured contractor with a good reputation. It is also a good idea to inspect your attic, if possible, to be sure your roof is not leaking. If there is a problem, be sure to report it as soon as possible.

Your homeowner’s policy includes general liability and there is no surcharge for having a solar system. So far, there do not appear to be many liability claims because of solar panels, but there is at least some risk. One obvious risk is that solar panels produce electricity which creates the potential for an electrical shock. In addition, an improperly designed or installed system could literally fall on someone. We know of one recent case where a solar system was literally blown off the roof during a windstorm. In addition, solar panels contain some hazardous materials, like silver, tellurium or indium. We may not understand all of the risks regarding solar panels for several years.  

The consensus is that the advantages of installing a solar system outweigh the disadvantages.  We personally think solar energy is a good idea, particularly in a state like California. Being aware of the risks helps you make better decisions to manage that risk.

For more information on this subject or to find out more about insurance, contact:

T.D. McNeil Insurance Services - Folsom, CA

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