Do Solar Panels Increase Home Insurance? A 2026 Guide

More homeowners are embracing solar energy, but with that excitement comes a lot of questions—especially about hidden costs. This often leads to the big one: do solar panels increase home insurance premiums? It's a valid concern. You want to save on your energy bills, not trade those savings for a surprise insurance hike. You might also wonder, are solar panels covered by home insurance at all? Let's clear the air. We’ll give you the straightforward answers you need to move forward with confidence.

As more American households turn to solar power for its renewable and cost-saving benefits, homeowners need to understand if their home insurance will cover damages or losses related to their solar panels.

Solar panel insurance coverage is a concern among new solar adopters. It’s, therefore, essential to ask the right questions when shopping for insurance. Your solar panel systems are a significant investment, and it’s wise to ensure they are adequately protected against loss and damage.

The good news is that most home insurance policies do provide some coverage for solar panels. However, what exactly is covered will depend on individual policy details. Keep reading to learn more about residential solar panel insurance.

Are Solar Panels Covered by Home Insurance?

When it comes to solar panel insurance, most home insurance policies already have your system covered, so there's no immediate need for a separate residential solar panel insurance policy. Solar panel systems and rooftop panels are deemed a permanent feature of the property, much like other additions such as security systems or patios.

Nearly all types of rooftop solar systems that are securely attached to your property should be covered under the terms of your solar panel insurance policy, including monocrystalline panel systems, polycrystalline panel systems, hybrid panel systems with heat exchangers, and solar tiles.

These will typically be covered for damages from theft, vandalism, falling trees, fire, and ground subsidence. However, some solar panel insurance policies may not protect against specific threats (e.g., wind, flooding) that may cause damage to your system, so be sure to double-check your home insurance and solar panel insurance policies for exclusions.

It's important to review your insurance policy as you'll only receive coverage if a covered peril damages your panels. Covered perils are the types of damage that your insurance will cover replacement or repair for, such as hail or fire.

That said, most standard home insurance policies don't cover damage caused by normal wear and tear or natural disasters like earthquakes or floods. If you live in an area prone to these disasters, you may want to contact your insurance provider directly and ask about additional coverage, such as a separate residential solar panel insurance policy or add-on rider to your existing policy.

In addition, systems like ground-mounted panels, solar panel carports,  freestanding solar panels, or systems large enough to require separate coverage may not be covered under a standard home insurance policy. So it’s important to discuss these details with your provider in advance.

Owned vs. Leased Panels: Who Is Responsible?

One of the first questions to ask when considering insurance is who actually owns the solar panels. The answer determines who is responsible for insuring them. If you purchase your system outright, as you would when working with a trusted installer like AMECO, you own the panels and are responsible for adding them to your insurance policy. This gives you complete control over your investment and its protection. On the other hand, if you lease your panels or have a Power Purchase Agreement (PPA), the leasing company typically retains ownership and is responsible for insuring the equipment. It's always a good idea to review your lease agreement carefully to understand the specifics of coverage and liability in case of damage.

How Your Policy Covers Different System Types

The way your home insurance policy covers your solar panels often depends on where they are installed. Insurance providers typically categorize solar installations into two main types: those attached to your home's roof and those installed elsewhere on your property. Rooftop systems are generally considered part of the house itself, while ground-mounted systems are treated as separate structures. This distinction is important because it determines which part of your homeowner's policy will apply. Understanding this difference will help you confirm you have the right amount of coverage for your specific solar solution before you ever need to file a claim.

Dwelling Coverage for Rooftop Panels

For most homeowners, solar panels are installed directly on the roof. In this case, the panels are considered a permanent part of your home's structure. As a result, they are typically covered under your policy's dwelling coverage (often listed as Coverage A). This is the part of your policy that protects the physical structure of your house from damage. Because adding solar panels increases your home's value, it's crucial to notify your insurance provider about the installation. They will help you adjust your dwelling coverage limit to ensure your home and your new solar system are fully protected, giving you peace of mind for your residential solar investment.

Other Structures Coverage for Ground-Mounted Systems

What if your solar panels aren't on your roof? Ground-mounted systems, solar carports, or panels on a detached shed are treated differently by insurance companies. These installations are typically protected under your policy's "other structures coverage" (often listed as Coverage B). This coverage is designed for structures on your property that are not attached to the main house, like a fence or a detached garage. It's important to check the limits on your other structures coverage, as it's often a percentage of your total dwelling coverage. If the value of your ground-mounted system exceeds this limit, you may need to purchase additional coverage to ensure your investment is properly protected.

Will Solar Panels Increase Your Home's Value?

When you invest in large-scale home improvements, such as solar panels, the value of your property is sure to increase. Solar panels are an energy-efficient and eco-friendly option for your home. They also make a very attractive selling point for prospective buyers. Solar panel installation may cost anywhere between $15,000 to $35,000 in the US, making solar systems a significant investment that can improve the value of your home.

The US solar market is growing rapidly, and the average cost of residential solar installations has dropped by more than 60% in the last decade alone. This means that in addition to increasing the value of your property, you can also benefit from reduced installation costs.

Will Solar Panels Increase Your Home Insurance Cost?

Yes, installing solar panels can increase the cost of your home insurance due to its implied value. Your home insurance policy considers not only the value of the physical structure but also the belongings inside it and the modifications you make to your property.

Home insurance premiums are typically determined based on the home's value. This ensures it is adequately protected if an incident that falls in the purview of your policy  occurs. As a result, most solar homeowners might need to increase their insurance policies to match the increase in their home's value.

If you plan on getting a solar power system installed in your current dwelling, you should also make sure your insurer knows about it. It is always important to inform your insurance provider of any modifications you make to your house, such as installing solar panels, so you are adequately insured.

Going solar not only increases your home's market value but also magnifies its rebuild cost. This refers to the cost required to rebuild your home from scratch in the event of total destruction.

It is an essential consideration for insurance providers since anything that affects the structure of a property needs to be accounted for. A slight rise in premiums may occur as a result.

Why Your Premium Might Change

The Need for Additional Coverage or a New Policy

When you add a significant asset like a solar energy system to your home, you're increasing its overall value. To properly protect that new value, your insurance coverage needs to be adjusted. This adjustment is what can lead to a small increase in your premium. It's not a penalty; it's simply ensuring your entire property, including your new solar panels, is covered for its full replacement cost. Think of it as updating your policy to match your home's new, improved state.

While a premium increase might sound daunting, it's usually quite modest. Many homeowners see an increase of just a few dollars a month, though it can be a couple of hundred dollars per year depending on your system's value. The most important step is to call your insurance agent before installation. Letting them know you're adding solar panels ensures they are included in your policy from day one. Without this conversation, you risk having a major part of your home unprotected.

How Much Does It Cost to Insure Solar Panels?

As mentioned, most solar panel systems are covered by standard home insurance policies. As opposed to commercial solar panel insurance, which is determined on a standalone basis, residential solar panel insurance is added to a home insurance policy, if needed, in the form of a solar panel insurance rider or an increase in your policy premium.

In most cases, determining the cost of residential solar panel insurance is a straightforward calculation based on the system’s value or how much it would take to replace it. This total amount typically includes all other valuables in your home, making up a property's total insurable value.

In the case of complete destruction or loss, your total insurable value denotes the sum of all replacement costs for any covered property and content within. In simpler terms, if you experience a catastrophic event such as a flood or fire that destroys your home, this value is the sum the insurance provider would need to pay for rebuilding your home and providing similar living conditions for you and your family.

Establishing the insurance rate for your solar panel system is largely based on the

estimated risk to your home. Usually, homeowners' property premiums are assessed by these four criteria:

Construction: The scale and type of materials used for your home.

Occupancy: The risks associated with the type of people and activities at home.

Location: The level of natural disasters and the associated risks.

Protection: Smoke alarms, central station fire alarms, moisture detectors, and similar features count as home protection.

Each of these aspects affects the insurance rate for your home, including your solar power system.

Understanding the Average Premium Increase

Okay, so your premium might go up, but by how much? While every policy is unique, the change is often more modest than you might think. According to some reports, the average increase can be less than $10 a month, though it can vary depending on your provider and system value. This adjustment happens because adding a solar solution increases your home's overall value and, consequently, its rebuild cost. Your insurance provider updates your coverage to make sure your entire property—including your valuable new panels—is fully protected if the unexpected happens. It’s a small price for the peace of mind that comes with safeguarding your home's new energy source.

What Home Insurance Typically Excludes

While your home insurance policy is your primary safety net, it’s important to understand its limits. Insurance isn’t designed to cover every possible scenario, and policies have specific exclusions you need to be aware of. Knowing what isn't covered helps you identify any gaps you might need to fill with separate coverage or rely on warranties for. For California homeowners, this is especially critical, as common regional risks like earthquakes are often excluded from standard policies. Reading the fine print of your policy is the best way to get a clear picture of your protection before you need it.

Common Policy Exclusions

Most standard home insurance policies will not cover damage from normal wear and tear. Over time, components may degrade, and that maintenance is considered the homeowner's responsibility. More importantly, many policies specifically exclude damage from natural disasters like earthquakes or floods. Some may even have exclusions for wind or hail damage, depending on your location. It's crucial to review your policy documents carefully to see which perils are covered and which are not. If you find your solar system isn't protected from a specific threat common in your area, you'll want to talk to your agent about supplemental coverage.

The Role of Manufacturer and Installer Warranties

Your insurance policy isn't your only form of protection. Your solar panels come with a manufacturer's warranty, which covers defects in the equipment itself. Additionally, your solar installer provides a workmanship warranty, which covers issues related to the installation quality. These warranties are your first line of defense. For example, if a panel fails due to a manufacturing flaw, the manufacturer's warranty would apply. A reputable installer with decades of experience will also provide a robust warranty, giving you peace of mind that your solar solution is built to last and backed by a commitment to quality.

Other Financial Risks to Consider

Beyond your insurance premium, adding a solar panel system can introduce a few other financial considerations you’ll want to plan for. These aren't meant to be deterrents, but being aware of them ahead of time can save you from surprises down the road. Thinking about these factors is part of making a well-rounded financial decision. When you add a significant asset to your home, it naturally has a ripple effect on other aspects of your finances, from your insurance coverage levels to your property's assessed value. A little foresight ensures your transition to solar is as smooth and predictable as possible.

The Danger of Being Underinsured

One of the biggest risks is failing to update your insurance provider about your new solar system. If you don't report the addition, you could find yourself "underinsured." This means that in the event of a major disaster that destroys your home, your policy might only cover the cost to rebuild the house as it was *before* the solar installation. You would be left without enough funds to replace your valuable solar system. It’s a simple step to inform your insurer, but forgetting to do so can leave you with a significant financial gap when you can least afford it.

Potential Impact on Property Taxes

When you install a solar panel system, the work requires permits from your local city or county. This process officially notifies your municipality of the upgrade to your property. Because solar panels increase your home's value, this can sometimes trigger a reassessment of your property taxes. While no one loves higher taxes, it's important to view this in context: it's a direct result of making a valuable, long-term investment in your home. Think of it as a confirmation that you've added significant worth to your property, which is a positive outcome in the long run.

Actionable Steps for Insuring Your Solar Panels

Feeling prepared to handle the insurance side of going solar is all about taking a few simple, proactive steps. By communicating clearly with your insurance provider and your installer, you can ensure you have the right coverage in place from day one. This process can be broken down into three key phases: before, during, and after installation. Following this roadmap will help you secure your investment properly and give you the confidence that your system is protected against the unexpected. It’s all about asking the right questions and making sure your policy reflects your home's new reality.

Before Installation: Do Your Homework

The most important step you can take is to contact your insurance agent *before* you sign an installation contract. Let them know you're planning to install solar panels and ask how it will affect your policy. Key questions to ask include: Will this increase my premium? What specific perils (like fire, hail, or wind) will the panels be covered for? Does my policy cover damage that could occur during the installation process? Getting these answers in writing will help you understand your coverage and budget for any potential premium increases, ensuring there are no surprises later on.

During Installation: Understanding Installer Liability

While your system is being installed, the primary responsibility for any mishaps falls on your installation company. A professional and experienced installer will carry their own liability insurance to cover any accidental damage to your property during the installation process. This is one of the many reasons why choosing a well-established company is so important. For example, a company with a long track record and a transparent approach to projects will have these protections in place, ensuring that you are not held liable for their work. Always confirm your installer is licensed and insured before they begin.

After Installation: Update Your Policy

Once your solar panel system is fully installed and operational, it's time to make it official with your insurance company. Contact your agent and provide them with the final details of the project, including its total value. Your agent will then formally update your policy to increase your dwelling coverage to match the new replacement cost of your home. This ensures you are no longer underinsured. Make sure you also account for any other new components, like a battery backup system, so your entire investment is protected. Request a copy of the updated policy for your records.

How to Choose the Right Solar and Roofing Provider

Going solar is a huge step; you'll want to trust only the best providers for your roofing and solar panel needs. At AMECO Solar and Roofing, you can rest assured that your home is in expert hands. With our comprehensive services, homeowners can be sure their investment will be protected for years to come.

Our team has been in the solar industry for almost five decades now, providing high-quality solar and roofing services to help homeowners make informed decisions about their home energy needs. From solar panel installation to solar batteries and system maintenance, AMECO has you covered!

Frequently Asked Questions

Will getting solar panels automatically make my home insurance more expensive? Not necessarily, but it's a possibility. Adding solar panels increases your home's value, so your insurance provider will likely need to increase your coverage to protect that added value. This adjustment can lead to a small increase in your premium, often just a few dollars a month. The best approach is to call your insurance agent before installation to understand how your specific policy might change.

What's the difference between how rooftop and ground-mounted solar panels are insured? Insurance companies treat them differently based on where they are installed. Rooftop panels are usually considered a permanent part of your house and are covered under your policy's "dwelling coverage." Ground-mounted systems, on the other hand, are typically seen as separate structures, like a shed or fence, and are covered under your "other structures coverage." It's important to check the limits on this coverage to make sure it's enough for your system.

If I lease my solar panels, am I still responsible for insuring them? Generally, no. If you lease your panels or have a Power Purchase Agreement (PPA), the company that owns the system is typically responsible for insuring the equipment. However, you should always review your lease agreement carefully to understand the specific terms and confirm who is liable for any potential damage. If you purchase your system, you own it and are responsible for its insurance.

What happens if my solar panels are damaged during installation? Your installer should be responsible for any damage that occurs during the installation process. A reputable, professional installation company will carry its own liability insurance to cover accidents that might happen while they are working on your property. This is why it's so important to choose a licensed and insured installer with a long track record.

Does my home insurance cover every type of damage to my solar panels? No, standard home insurance policies have exclusions. They typically don't cover damage from normal wear and tear, and many policies exclude damage from natural disasters like earthquakes or floods. Your panels also come with manufacturer and workmanship warranties, which cover equipment defects and installation errors. It's crucial to read your policy and understand what is and isn't covered so you can address any gaps.

Key Takeaways

• Your home insurance probably already covers solar panels: Most standard policies treat rooftop solar panels as a permanent part of your home's structure, covering them under your dwelling coverage. Just be sure to confirm how your specific policy handles different system types, like ground-mounted arrays.
• Update your policy to protect your investment: You must inform your insurance provider after installing solar panels. This allows them to adjust your coverage to reflect your home's increased value, ensuring you have enough protection to cover a full replacement if needed.
• Expect a small and reasonable premium adjustment: Since solar panels add significant value to your property, a modest increase in your insurance premium is normal. This small cost ensures your valuable new energy system is properly insured against unexpected events.

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