By Kirk Reisner, Partner, MBG Insurance
Solar panels are going up on homes all over the Ozarks. Homeowners do their homework on the panels: the installer, the financing, the tax credits, the payback period. The one call most people skip is the one to their insurance agent. That call should happen before the panels go on the roof, not after the first hailstorm.
Two Good Carriers, Two Completely Different Approaches
We recently reviewed homeowners policies from two well-rated carriers we represent. Each one addresses solar panels in a completely different way.
Carrier A has a specific exclusion for wind and hail damage to solar panels. The exclusion applies whether the panels are on the house or on another structure, and it also reaches related equipment such as the system’s piping and controls. If hail cracks the panels, the policy doesn’t pay for them. The panels are still covered for other causes of loss, such as fire, lightning, or a falling tree.
Carrier B doesn’t mention solar panels anywhere in the policy. Panels attached to the home are treated as part of the dwelling and covered like the roof, siding, or any other part of the house. Hail damage to the panels is covered, and losses are settled at replacement cost once repairs are complete.
We’ve also seen carriers go further than Carrier A and exclude all damage to solar panels, whatever the cause.
Southwest Missouri sees a lot of hail. For a homeowner with $20,000 to $40,000 of panels on the roof, the difference between those policy forms is significant.
Different Doesn’t Mean Better
This is the most important point in this article: Carrier A isn’t a bad company, and Carrier B isn’t automatically the better one.
Carriers make different underwriting decisions for good reasons, and those decisions show up in price. A policy that excludes hail damage to solar panels may be an excellent fit and a great value for a homeowner without panels. For a homeowner with a large system on the roof, the same policy could leave a painful gap.
The question isn’t “which carrier is best?” It’s “which carrier is best for your house and your situation?” That’s the job of an independent agent who can see how multiple carriers handle the same risk and place you with the one that fits.
Coverages I Recommend Reviewing When You Go Solar
1. A solar panel endorsement if your panels aren’t covered
If your current policy excludes solar panels, either for hail or for everything, ask your agent whether the carrier offers an endorsement to add coverage back. Some carriers do, some don’t. If yours doesn’t, it may be time to compare carriers that cover panels as part of the home.
2. Higher liability limits
A grid-tied solar system connects your home directly to the power company’s equipment. In the rare event your system malfunctions and damages the utility’s lines or transformers, or injures a lineworker, you could be held responsible.
Missouri’s net metering rules make this worth thinking about. Utilities generally can’t be held liable for damage caused by a customer’s generating system unless there’s clear and convincing evidence of fault on the utility’s part. Larger systems must carry minimum liability insurance. Smaller residential systems aren’t required to carry any additional insurance at all, which leaves the responsibility with the homeowner’s own policy.
The minimum required is not the same as what’s smart. Review the personal liability limit on your homeowners policy, consider a personal umbrella policy, and read your utility’s interconnection agreement. Municipal utilities and co-ops may set their own requirements.
3. Ordinance or law coverage
Building codes and municipal requirements for solar installations are changing. If a damaged system has to be repaired or reinstalled, the work may need to meet current electrical, fire, and permitting requirements, not the ones in place when the panels were first installed. Standard home policies generally don’t pay for code-required upgrades unless you have ordinance or law coverage, and the amount of that coverage varies by policy. Verify that you have it and that the limit makes sense for your home.
Questions to Ask Your Agent Before You Install
- Does my policy exclude solar panels, either for wind and hail or for all causes of loss?
- If my panels aren’t covered, can I add a solar panel endorsement?
- How are attached panels settled after a covered loss: replacement cost or actual cash value?
- Do I need to raise my dwelling limit to account for the value of the system?
- Do I have ordinance or law coverage, and is the limit enough?
- Are my liability limits high enough, and should I add an umbrella?
- If my panels are leased, who insures them: me or the solar company?
Bring Your Agent Into the Conversation Early
If you’re getting solar quotes, add one more call to the list. A few minutes with your agent before installation can tell you whether your current policy fits your new setup or whether another carrier would serve you better. And make sure your insurance company knows the panels are there. An undisclosed system can create problems right when you need to file a claim.
At MBG Insurance, we represent dozens of carriers. That lets us compare how each one handles solar panels and match you with the right fit, not just the first available option. Learn more about our homeowners insurance options, or contact our Springfield or Oak Grove office to review your coverage before you install.
Solar Panel Insurance FAQ
Does homeowners insurance cover solar panels?
It depends on the carrier and the policy. Some homeowners policies cover roof-mounted panels as part of the dwelling, the same as the roof or siding. Others exclude wind and hail damage to panels, and some exclude all damage to solar panels. The only way to know is to read your policy or ask your agent.
Can I add coverage if my policy excludes solar panels?
Some carriers offer an endorsement that adds solar panel coverage back to the policy. If yours doesn’t, an independent agent can compare carriers that cover panels as part of the home.
Do I need extra liability insurance if I have solar panels in Missouri?
Missouri doesn’t require additional liability insurance for most residential systems of 10 kW or smaller. Larger systems must carry at least $100,000 in liability coverage. Because the utility generally isn’t liable for damage caused by your system, we recommend reviewing your liability limits and considering an umbrella policy.
Why does ordinance or law coverage matter for solar panels?
Code and permit requirements for solar systems are changing. If your system has to be repaired or reinstalled after a covered loss, ordinance or law coverage helps pay the added cost of bringing it up to current requirements.
What if my solar panels are leased?
Leased panels typically belong to the solar company, not you, so your homeowners policy may not cover them. Check your lease to see who is responsible for insuring the panels and who pays to remove and reinstall them if your roof needs to be replaced.