Generally, residential solar energy installations are covered under a standard Rhode Island homeowner’s nsurance policy for perils such as wind, fire, or hail damage and other risks such as theft.
However, some factors can affect insurance and every policy differs. You’ll also want to consider the following factors before you decide to go solar.
Is Solar Permitted?
If you live in an HOA, check with your association. Their bylaws may exclude solar or specify requirements such as obtaining written permission and an installation permit, sticking to the local building code, and more.
Otherwise, most homeowner’s just need a permit before work begins in Rhode Island and must use a licensed Renewable Energy Professional (REP) or a licensed Electrical Contractor for the work.
Discuss your policy with your local independent insurance agent to confirm it covers solar. If it does, review your policy’s limits. Installing a solar energy system involves a significant investment; which may increase your home’s insurance value, sometimes referred to as rebuilding cost.
According to EnergySage, a household solar system ranges from around $13k to almost $26k in Rhode Island, and that’s after a 30 percent solar federal tax credit.
Solar Panel Location
The design of your home and the lay of the land usually determine whether your solar panels are best suited on the roof, the ground, or in another location.
Usually, rooftop solar panels become part of your home and as a result they’re included as property under your homeowner’s insurance policy. However, a standard policy may not cover ground-mounted solar panels or solar panel carports unless you add an endorsement. If you have an expensive system, you may need a separate policy.
Have your insurance agent review your claim limits, too. It is the maximum amount paid out for a loss and where you install your solar system could affect the limit. Policies usually provide different limits for the main structure and outbuildings. Outbuilding limits are often only 10% of the dwelling limit.
The liability coverage in a homeowner’s insurance policy covers accidental property damage, such as a tree falling on your house. However, it usually excludes damage caused by intentional work.
The company you choose to do the work should have their own liability insurance and offer a workmanship warranty to protect you from installation errors and damage to your solar system, roof, or other property.
Lease or Buy
Some companies now offer leases or power purchase agreements for solar energy systems in Rhode Island. They own the equipment and they’re responsible for the maintenance so it theoretically shouldn’t affect your insurance.
Nonetheless, get your insurance agent to review the agreement before you sign. Limitations or exclusions could create an insurance gap. If you buy the equipment, you may need to increase the coverage limit for your home.
The law requires you to use a licensed company, because adding heavy equipment and an electrical system to your home increases risk. A good contractor assesses your property, installs equipment safely, and warranties their work.
Don’t assume your homeowner’s insurance policy protects you during and after a solar installation. Insurance policies are complex, so rely on an independent insurance agency like ours for expert advice. We’re up on the latest insurance issues and can make sure that you’ve got the right coverage at the best possible rates.