Solar Panel Insurance: The Good, The Bad & The Exclusions

Insuring your new rooftop solar power or battery system can provide peace of mind. It’s a simple process to pay the premium, but what happens in the unlikely event of a claim? Will the insurance company be equally as keen to hand over the cash?

Let’s discuss how insurance for solar works, whether you need it, if you can get it, and what to do when things go pear-shaped with an insurance claim.

First, I am not an insurance professional. The following information has been compiled from conversations with insurance companies and anecdotal evidence. The usual disclaimer¹ applies.

How Do You Insure Your Solar/Battery System?

Very easily. Phone your insurance company and tell them you want to add your solar power system to the existing home insurance policy. They will ask you the valuation you wish to insure it for, then add that to the insured value of your existing policy, and send out an adjusted invoice.

Quite often, that’s all there is to it. Insurance companies have become adept at making the signup/payment process so seamless you barely notice. You usually don’t have to itemize details of your system upfront. However, you’ll most likely need them in the event of a claim.

Home Or Contents Insurance

99% of the time, your rooftop solar/battery  system will be insured under the ‘home’ insurance, not the ‘contents’ section. Home insurance typically covers the building and permanent fixtures, including any electrical equipment with fixed wiring.

Budget Direct Home & Contents Insurance Policy PDS shows coverage of energy storage systems and solar panels. It couldn’t get any clearer than that. Image: Budget Direct

However, there are some circumstances in which the rooftop solar/battery system may not be regarded as a permanent fixture to your building, and might be insurable under the ‘contents’ section of your insurance policy.

For example, if you had a ground-mounted solar panel array in the backyard, your insurance company may not view that as part of the building, which quite rightly, it isn’t. Other insurance companies may have a different view, so it’s best to pose the question directly to them.

What Exactly Is Covered?

Typically, solar/battery systems are covered for the same insurable events as the rest of your home insurance policy. Most natural disaster events, such as storms, lightning, hail, and fire might be claimable. Also theft, vandalism, and public liability.

Some policies will cover additional electricity expenses incurred while waiting to repair or replace your solar/battery system during an insurable event. Will they cover solar energy generation losses during that period? Probably not.

GIO Home & Contents Insurance Policy PDS showing cover for energy costs for loss of supply of renewable energy. Image: GIO

Events Not Covered

Each insurance company is different, so don’t assume all the above will apply. Exclusions may include some of the following, and most likely more items:

• Flood damage: This is often not automatically covered in a standard home insurance policy. However, you can usually apply for optional flood cover at extra expense.
• Accidental damage: If you drive home from a hard night out and side-swipe your inverter or solar battery on the garage wall, don’t assume to get reimbursed for repairs. Check your paperwork.
• Unoccupied homes: Some insurance companies stipulate that you must inform them if your property is unoccupied for more than 60 days, otherwise, all coverage stops.
• Components covered by warranty: Components of solar and battery systems that are covered by manufacturer product and performance warranties are not covered by home insurance. This could be an area of contention during a claim!

Hot tip for buying insurance:

Every insurance company has a PDS (Product Disclosure Statement) for all of their products available on their website. You don’t have to be a customer to view the PDS. It’s a very simple process to download them and use the ‘Find’ function to search for keywords such as ‘solar’ and find out the policy wording. This could save you hours on the phone trying to get an answer to your question from a bewildered customer service representative.

A quick scan of your preferred insurer’s website will come up with a page full of relevant PDS documents. Image: Suncorp

You May Be Denied Solar Insurance

There may be instances where an insurance company sees your situation as too risky, or perhaps not fitting neatly into a stereotypical insurance category, so insurance may be denied. The following are a couple of curly insurance questions that have been posed to SolarQuotes in the past:

Pre Handover Solar Install

“We’re installing the solar (inverter and panels) prior to the house being completed and handed over, but I’m struggling to find anyone who will insure the solar inverter or panels because it’s not yet seen as a ‘house’ for insurance purposes. The builder can insure it under their insurance on the site, but the excess for any incident would be more than the full cost of the system.

 

Do you know of any organisation that insures solar in this situation? Surely someone must have had the same need? My concern is that we’re heading into a potentially bad storm season and there has been giant hail already.”

Unfortunately, this customer is caught between a rock and a hard place. Although I sympathise with them, I don’t have the answer they most likely want to hear. An insurance broker might be the best person to answer this question, unless any readers would like to chime in (please do).

Strata By-law Problem

“I am moving into a strata title villa. The owners’ corporation has a bylaw that states specifically that its building insurance policy will not cover solar panels if owners have them installed on their roof space. So far four insurance companies have also told me they will not cover solar panels under their contents policies and won’t give me building coverage as I don’t own the roof. Do you know of any insurance companies which might offer cover? I’m sure I can’t be the only person facing this issue.”

It seems ludicrous that a strata by-law would prevent an owner from insuring a rooftop solar power system on their property. Once again, I don’t have the answer to address the murky waters of strata roof ownership and liability. Any lawyers out there?

Making A Claim

Claiming damages incurred on a solar power/battery system is no different from any other insurance claim. Contact them and provide details of your claim. They will either go through the usual barrage of questions on the phone or send out a claim form.

They may ask you to send photographs and documentation to prove ownership of the damaged items. If the claim is a substantial one, they will send out an assessor to take a look at your property. Be nice to him/her. No one likes a whinger.

It may be a drawn-out process before the claim is approved, so be patient and polite, and do your best to help them give your claim a big fat tick.

I don’t think there’s any disputing that this is an insurable event. Image: Kirsten Morgan

Roof Leaks – Who You Gonna Call?

Sometimes, an insurance claim isn’t necessary. A quick call to your solar installer should be able to sort out the problem. Unfortunately, life isn’t always that simple. This poor lady is getting the run-around:

“I need advice. My sister had her solar panels installed a few weeks back and installation isn’t finalised. After installation, within a couple of weeks it rained and she is having a leak in her master bedroom. She contacted the solar business that did the installation and she is being given the run-around, he said he tried to contact the individual in charge of repair but can’t get to him.

 

So my sister went ahead and opened up a claim through her insurance, but I am of the impression that this needs to be done through the business insurance of the solar company. My sister doesn’t know who to call or what to do but this business should be held accountable.”

This woman’s sister did the right thing. If a rooftop solar install is suspected of causing a roof leak, the first port of call should be the installer. Any reputable business will address their customer’s concerns².   If the situation can’t be resolved quickly, then it’s time to talk to the insurance company. They will send out an assessor who will ascertain the cause of the leak. If it is indeed the solar installer’s fault, your home insurance company will recover any costs.

Rectification Costs For Installers

While we’re on the subject of leaky roofs caused by solar installs, here’s a heads-up for installers thinking they’re fully covered by public liability insurance. Check your policy! Damage caused to the roof during an installation and subsequent water damage will most likely be covered. However, the cost of removing/reinstating the panels and associated equipment may not be.

This is all the more reason for a customer to use a reputable solar business. It’s in their interest to do a good job the first time. Any callbacks are money down the drain.

Insuring Like-For-Like Solar Components

Insurance companies usually offer ‘like-for-like’ or ‘new-for-old’ replacement of insured items. During a claim, they may offer to replace your solar system with different products. One reader asked us the following question:

“I had a fully off-grid system. Solax 5000 inverter, 5000kw panels, and 9.6kwh LG battery.(6.4+3.2). Lightning has destroyed the BMS in the Battery and insurance company want to replace with a Huawei Luna2000 inverter and 10kwh battery. Q: Is the Huawei inverter configurable for off-grid?”

While I won’t comment here on what is suitable as a replacement for this customer’s particular solar installation, I will say one thing. There may be a valid reason for them not offering the same replacement. Talk to them and find out why.

If, for some reason, you’re not happy with an insurance company’s ruling, or if they’ve knocked back a claim you think is valid, there’s some information here that will help you with the dispute resolution process.

Dodgy Dealer – Insurance Fraud

Some people are trying to get away with fraudulent insurance claims to make a buck. The person that wrote to us didn’t want a bar of it, but unwittingly have got themselves embroiled in more than they asked for:

“I’m facing trial. I contacted solar guy with a problem where my inverter wasn’t working. He called around said my panels were really good but after a few minutes he said the way to solve this problem is to put in a claim through my insurance. He said he’d done this before and RAA always pay, then he would upgrade my system more panels for $4-5,000 and in a few years it would pay for itself. He emailed a quote and with an insurance claim.

 

I got another quote from a reputable electrician, who replaced the inverter for $800 and all is good! I cancelled first quote, but he charged my $400 for his visit. There was never a mention of a charge before this. He’s taken me to court and also wants to be paid for time lost for this. That wasn’t a solution so now I’m going to trial in a few weeks.”

Wow! This is just bad luck. My advice – this installer needs to be reported immediately, and get legal advice regarding the next steps.

The Best Solar Insurance Is Due Diligence

While adding your solar power system to your home insurance is typically straightforward, the specific coverage can vary between insurance companies. Knowing what events are covered and the potential exclusions is essential and easy to find out. Thankfully, the anecdotal examples above are the exception rather than the rule, but nonetheless demonstrate that the best insurance is always due diligence.