How Do I… Insurance & Solar Power

When it comes to solar power, insurance coverage is an important part of the conversation. Receiving adequate coverage should not be a barrier to gaining energy independence. We’re working hard to assist folks impacted by these issues on a local and legislative level. In the meantime, we’ve got answers to some frequently asked questions that we see from insurance companies and customers.

Should I speak with my insurance agent about installing solar?

Yes! We always recommend speaking with your home insurance carrier before moving forward with a solar project. In fact, we highly recommend reaching out before you start receiving solar quotes. We always encourage clients to add their solar power systems to an existing homeowners’ insurance policy if possible. However, you may want to be prepared for potential pushback from your insurance agent. As a policy holder, you are entitled to a full explanation of where any exclusions exist in your policy, and you can request a copy of these exclusions in writing.

Will adding solar increase my homeowners’ insurance premium?

It is possible that you may see an increase in your premium if you add solar, but only to the extent of the value of your system. Any increases should be minimal because they depend on the value of your solar power system in relation to the value of your home.

Each insurance company will have their own policy and potential price changes. If your premium increases beyond what you’re willing to pay, it may be time to shop around for a new policy. We’re happy to recommend insurance carriers and agents that can assist.

Will my insurance company drop my coverage if I install solar?

If your insurance carrier threatens to drop your coverage, you are entitled to an explanation why. The agent is required to show you where this exclusion exists, and we recommend receiving this explanation in writing. In addition, if your carrier threatens to drop your coverage, we highly recommend shopping around for a new policy. We’re happy to recommend a variety of carriers and agents that can provide coverage for your project.

As we continue to battle insurance issues across the board here in Florida, we’re hearing from more and more customers that insurance companies will cancel coverage if a homeowner installs solar. Many of the insurance company’s justifications are not based in fact, and we’re doing our best to combat the misinformation that we often see these companies peddling to their customers.

My agent says going solar turns my home into a business. Is this true?

We’ve been in the solar business a long time (10+ years to be exact!) and we know of only one insurance company in Florida that currently does not cover customers who have solar. Their argument? Net metering. Net metering is a billing mechanism that compensates solar owners for excess energy they send back to the grid.

Insurance companies argue that receiving a credit for excess energy means you’re “selling” energy to the utility. This “transaction” labels you a business in the eyes of some insurance companies. However, advocates are challenging this issue in court. In addition, according to IRS tax laws, your home does not automatically become a business simply because you have solar and a net metering agreement. If you happen to work with this insurance carrier, we recommend shopping around.

My agent says I’m liable if panels continue to push electricity to the grid during a power outage. Is this true?

All solar power systems include fail-safe measures to prevent electricity from flowing onto the grid during a power outage – a legal requirement. If the power goes out during a storm, your solar power system immediately disconnects from the grid. Before your system connects to the grid, the utility and Authority Having Jurisdiction (permit office) conducts an inspection for this mechanism. In addition, there is no known record of an accident like this ever happening anywhere in the country.

If your insurance agent addresses this issue, they may be referring to the specific liability insurance required for systems of a certain size. Utilities require homeowners operating a system over 10kW AC to carry additional liability insurance and show proof of this coverage before grid interconnection. Our Energy Consultants always review this requirement during the quote process.

Will my insurance company cover the cost of removing and reinstalling my panels due to storm damage?

After Hurricane Michael in 2018 and Hurricane Sally in 2020, SunFarm Energy performed many removal and replacement jobs. Insurance companies paid for this service in every instance where there was a viable windstorm and/or hurricane claim – a requirement included in most policies.

Keep in mind that your insurance company is not responsible for paying to remove and reinstall your system if it’s simply time for a new roof. This is why we do not recommend putting solar on a roof that will need replacement within 5 years. Be sure to speak with your Energy Consultant if you have any concerns about timing a new roof with the addition of solar.

SunFarm Energy is the only local installer with a full-time service department. We’ve completed hundreds of removals and reinstallations – and not just for our customers! Companies in our community frequently partner with us for these projects.