Installing a solar system on your home or commercial property is considered a construction upgrade to your home. A solar system install requires design and engineering, permitting through the City or County and then final inspection through the City or County providing the construction permits. Most solar providers and install teams make the process seem quick and easy. However, it is important to remember that it is a major construction process and a major investment into your home. This means it is important to make a phone call to your property insurance company to update your policy.
Update Your Insurance
One overlooked aspect of going solar is the importance of updating a homeowner’s insurance policy. Any homeowner in California that has an active mortgage is required to maintain an active property insurance policy on the property. This insurance, also known as hazard insurance or fire insurance, is vital to protect the home in the case of a catastrophic event, such as a fire. A well-written policy will pay to rebuild, or fix, damages to the home after a qualifying event.
Upon installing solar panels, it is important that you take the time to call your insurance provider to communicate the recent installation of the panels to your home. This quick phone call will ensure that your provider understands that updates and improvements have been made to your home. Without sharing the installation, your provider will not know what you have done with your home or the improvements, and the value of the improvements, to the property.
Just like a kitchen update or a bathroom renovation, a solar panel installation is considered a home improvement project. Many people under-report, or do not report at all, improvements to their property out of concern their insurance premium will increase. However, not reporting means that there is a chance, in the case of a claim your insurance will not cover any unreported improvements.
Home insurance premiums are based off of the reconstruction value of a home. A kitchen updated in 2018 with all the bells and whistles is much more expensive to replace than a 1997 kitchen without any upgrades. When your insurance policy reflects outdated materials, design or upgrades, the insurance policy will over cover what is reported in the policy and not what is actually in the home.
As for solar panels, if there is a fire, a policy that does not have the panels written into the policy will not replace the panels on the roof. A solar installation is a very large financial investment and not having the insurance to cover their loss in the event of a tragedy is a large risk. To ensure the protection of the investment, a phone call to your insurance provider will update your policy to cover the value of the panels in the event of a loss. Additionally, the cost for insurance is pennies on the dollar of replacement of the entire system.
If you are unsure of how to take the next step of calling your insurance provider, please take the time to reach out. One of the benefits of working with a local solar company is we have built relationships with many trusted insurance professionals who can walk you through the process of evaluating your homeowner’s policy and ensuring your home is becomes a well-protected asset. Going solar is an exciting time for a homeowner. Continue to ensure the life of your investment with an updated homeowner’s insurance policy.