Anyone financing a home purchase knows that the bank wants to see there is adequate insurance on the property. Unfortunately what is sufficient for a lender may not be sufficient for the owner. Homeowner policies contain a sea of coverage and exemptions which are sometimes difficult for policyholders to comprehend. If an improvement is made to the structure or a major fixture is installed, there may be some question as to whether the standard hazard policy will apply to damage in those areas. Owners should take beware and not assume that their current policies are satisfactory. Those with solar panels, however, can take some comfort in the knowledge that many programs include these energy-saving devices.
Solar Panels Are a Major Investment
There is a reason that solar panel producers say that these cost-saving measures will pay for themselves. The fact is that upfront costs are substantial. According to Forbes, the primary material used to create panels is silicon, the same substance used to make computer chips. Although silicon is an element in the earth’s crust, it is not readily usable in its raw form. Silicon must be extensively refined. Silicon disks—or wafers—are most often infused (professionals use the term “doped”) and coated by a phosphorous covering and then organized into cells. The cells are then mounted on a photo voltaic panel and backed by metal strips to conduct the heat from the sun.
With materials and manufacturing requiring so much financial input, it is little surprise that solar panels cost what they do. Realtor.com estimates that the standard 5-kilowatt solar package runs about $18,500. Not only is this a large amount to part with, it is also a tremendous risk for an insurer to cover. The question is whether a homeowner, having spent for purchase and installation, is willing to take the budgetary hit in premiums for additional insurance coverage. On the other hand, will the owner risk leaving such a capital expense uninsured? The good news is that such a choice might not be necessary.
Policies Favoring Solar Panels
Many insurance providers treat solar panels as they would a home security system or a balcony: as a permanent attachment to the property. Because of this determination, the panels are considered part of the house, and therefore subject to whatever benefits apply to damage from fire or the violence of the elements (flood always requires a specific and separate policy). This is in contrast to property separated from the house, like a detached garage or storage structure, which normally receives only 10 percent of replacement cost from standard home insurance coverage. This is cause for relief for many cost-conscious property owners seeking to cut their energy bills.