A homeowner installed a rooftop solar system and, upon notifying their insurance company afterward as a formality, was genuinely surprised by two things: a significant premium increase and a new set of coverage exclusions they hadn’t anticipated. They had assumed the panels would just be covered as part of their home’s value, but the reality of how insurance carriers underwrite this specific kind of addition is more detailed than many realize.

Myth: My standard policy automatically covers my new solar panels.

The reality is that while solar panels are typically considered a permanent fixture of your home, coverage is not automatic, and your existing limit may be insufficient. Solar panels can add tens of thousands of dollars to your home’s replacement value. Failing to inform your insurer and increase your dwelling coverage limit accordingly could leave you underinsured in the event of a total loss.

Worth specifically checking before installation: Does your policy cover rooftop systems under standard dwelling coverage (Coverage A)? How does it handle ground-mounted systems, which may require separate coverage as an “other structure” (Coverage B)? Some insurers may even refuse to cover systems that are leased or installed under a Power Purchase Agreement (PPA), since you don’t technically own them.

Myth: Adding solar panels won’t affect my insurance premium.

The reality is that adding significant value to your home almost always increases your insurance premium. The cost to replace your home is now higher, so the cost to insure it will be as well. Furthermore, some insurers view solar panels as an added risk factor for things like roof damage, water leaks, or electrical fires (especially with DIY installations), which can genuinely influence your rate beyond just the added value.

Myth: Any and all damage to my panels is covered.

The reality is that coverage depends entirely on the specific “perils” outlined in your policy. A standard policy will likely cover damage from common events like fire, wind, and hail. However, it’s worth checking for specific exclusions. For example, is damage from pests (like squirrels chewing wires) covered? Is damage that occurs during installation or maintenance covered?

Worth understanding directly: Does your policy have an “all-risk” (open peril) or “named peril” structure? An all-risk policy covers everything except what is explicitly excluded, offering broader protection. A named-peril policy only covers the specific risks listed, which is a genuinely important distinction.

Myth: My installer’s warranty is all the protection I need.

The reality is that insurance and warranties serve fundamentally different purposes and are not interchangeable. A manufacturer’s warranty covers equipment defects or premature performance degradation. An installer’s workmanship warranty covers issues related to the quality of the installation itself. Insurance, by contrast, covers damage from external events like a hailstorm or a tree falling on your roof. You genuinely need both for comprehensive protection.

A Quick Reference Myth vs. Reality Checklist

Myth Reality
Coverage is automatic You must inform your insurer and likely increase your coverage limits.
Premiums won’t change Expect a premium increase due to higher home value and potential risk.
All panel damage is covered Coverage depends on the specific perils included (or excluded) in your policy.
Warranty is enough Warranties cover defects; insurance covers external events. They are not the same.

What a Proactive Conversation Would Have Prevented

For the homeowner in our example, a simple phone call to their insurance agent before signing the solar contract would have revealed the exact premium impact and any new policy requirements or exclusions. This would have allowed them to factor the ongoing cost of insurance into their total solar ROI calculation and even shop for a more solar-friendly insurance carrier if needed, turning a post-installation surprise into a planned and understood part of the process.

Are you currently evaluating a solar project and wondering how it will impact your own insurance? Let me know what type of system you’re considering and I can help you formulate the specific questions to ask your insurance agent.

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