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How Solar Panels Affect Your Home Insurance
Installing solar panels is one of the most significant upgrades a homeowner can make — and it directly impacts your homeowners insurance in ways that catch many people off guard. Because solar panels raise your home's overall replacement cost, your existing dwelling coverage limits may no longer be sufficient to fully protect your investment. On average, a residential solar system costs between $21,000 and $43,000 before incentives in 2026, which means leaving your policy unchanged could leave you seriously underinsured after a covered loss.
The good news: most standard homeowners insurance policies do cover solar panels — but only if you notify your insurer and update your coverage limits. Where the panels are mounted, whether you own or lease them, and what caused the damage all play a role in how a claim is handled. Understanding these details before installation can save you from costly surprises later.
Coverage Basics: How Solar Panels Fit Into Your Policy
How your solar panels are classified under your policy depends largely on how and where they are installed.
Roof-Mounted Panels
Solar panels that are permanently attached to your roof are treated as part of the home's structure. This means they fall under your dwelling coverage — the same part of your policy that covers your walls, roof, and built-in fixtures. Covered perils typically include fire, lightning, hail, wind, falling objects, vandalism, and theft.
Ground-Mounted Panels
Panels installed on a separate structure in your yard (not attached to the home) are categorized under other structures coverage, which is typically capped at 10% of your dwelling limit. For example, if your home is insured for $350,000, other structures coverage maxes out at $35,000 — which may not be enough to cover a full solar array.
Inverter Coverage
Your solar inverter — the device that converts DC energy from the panels into usable AC electricity — is generally covered under the same policy as your panels. Damage from covered perils like lightning, fire, or hail would typically be included. However, inverter failures from manufacturing defects or normal wear and tear are not covered by insurance; those situations fall under manufacturer warranties, which typically last 10 to 25 years.
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Owned vs. Leased Solar Panels: A Critical Distinction
One of the most important — and most overlooked — factors in solar panel insurance is whether you own or lease your system. The difference determines who is responsible for insuring the equipment and who files a claim if something goes wrong.
Owned Solar Panels
If you purchased your solar system outright or financed it through a loan, you own the panels and they are your responsibility to insure. Your homeowners insurance policy should be updated to reflect their value. This may require increasing your dwelling coverage limit, which will typically raise your annual premium by $50 to $100 or more, depending on the system size and your insurer.
Learn more about how your dwelling coverage limits interact with your solar investment to avoid being underinsured.
Leased Solar Panels
If you are leasing your solar panels through a third-party company, the leasing company owns the equipment — and in most cases, their insurance policy covers the panels themselves. As a homeowner, you are generally not responsible for insuring the hardware.
That said, you are still on the hook for:
- Roof damage related to the installation or removal of leased panels
- Electrical damage caused by the panels to your home's systems
- Liability claims if someone is injured due to the panels on your property
- Emergency removal costs if the panels need to come off your roof for repairs
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Common Claim Scenarios & What's Covered
Understanding how different types of damage are handled can help you respond quickly and correctly when something goes wrong.
Hail Damage to Solar Panels
Hail is one of the most common causes of solar panel damage. Most standard policies cover hail damage for rooftop-mounted systems under dwelling coverage. However, in hail-prone states like Colorado, Nebraska, and parts of the Midwest, some insurers have begun adding wind/hail exclusions or higher separate deductibles for solar panels specifically. Always confirm your policy's hail coverage before and after installation.
Learn more about how severe storm damage is handled under standard home insurance policies.
Roof Leaks Caused by Solar Installation
If solar panels are improperly installed and cause a roof leak, your homeowners insurance will likely not cover the damage. Most policies exclude losses caused by faulty workmanship or improper installation. In this case, your best option is to file a claim against the solar installer's liability insurance — which is exactly why you should obtain a Certificate of Insurance from your contractor before work begins.
Understanding when home insurance covers roof damage — and when it doesn't — is essential for solar panel homeowners.
Roof Access During Repairs
If your roof needs to be repaired or replaced after a storm, your insurer may require the solar panels to be temporarily removed and reinstalled. This removal and reinstallation cost can range from $1,500 to $6,000 or more, and whether it's covered depends on your policy. Check if your insurer includes this in your dwelling coverage or if you need an endorsement.
Fire Involving Solar Panels
Fires involving solar panels — whether caused by an electrical fault, lightning strike, or inverter malfunction — are generally covered under standard fire and smoke perils. This includes both damage to the panels themselves and any resulting structural damage to your home.
Documentation Checklist for Solar Panel Claims
| Document | Why It's Needed |
|---|---|
| Photos/videos of damage | Visual evidence before cleanup begins |
| Energy production logs | Proves performance loss tied to the event |
| Weather reports | Confirms covered peril (e.g., hailstorm date/size) |
| Professional inspection report | Links damage to covered cause, not defect |
| Original purchase invoice | Confirms system value for replacement cost |
| Policy documents | Identifies covered perils and deductible amounts |
Notifying Your Insurer: What You Need to Do
Failing to notify your insurance company about a solar installation is one of the most costly mistakes homeowners make. If you never update your policy, your insurer has no obligation to cover the panels — and you could face a claim denial after a loss.
Notify Your Insurer Before Installation
Most insurers strongly recommend contacting your agent before signing your installation contract. This gives you time to:
- Confirm your current policy covers solar panels
- Determine whether you need to increase your dwelling coverage limit
- Ask about any exclusions (especially for hail/wind in your region)
- Obtain the installer's Certificate of Insurance
Should You Increase Dwelling Coverage or Schedule Panels Separately?
For most homeowners with owned panels, the simplest and most cost-effective approach is to increase your dwelling coverage limit to account for the added replacement value of the solar system. This is typically sufficient for standard rooftop installations.
However, if you have a large or high-value system (over $40,000), or if your insurer has exclusions for solar-related perils, scheduling the panels as a separate endorsement may provide broader protection and a lower deductible specific to the panels.
Typical Premium Increases
| System Value | Estimated Annual Premium Increase |
|---|---|
| Under $15,000 | $25 – $50/year |
| $15,000 – $30,000 | $50 – $100/year |
| $30,000 – $45,000 | $100 – $200+/year |
| $45,000+ | Varies significantly by insurer and location |
Frequently Asked Questions
Do solar panels automatically get covered by homeowners insurance?
Not automatically — you must notify your insurer after installation and confirm that your coverage limits are high enough to include the value of the panels. If your existing dwelling limit already exceeds your home's replacement cost plus the panel value, you may not need to make changes. However, most homeowners will need to increase their coverage limit to avoid being underinsured.
Will my home insurance premium go up if I add solar panels?
Yes, in most cases. Because solar panels increase your home's replacement cost, you will likely need to raise your dwelling coverage limit, which raises your premium. The typical increase ranges from $50 to $100 per year for a mid-sized system, though larger or higher-value systems can push premiums higher, especially in areas with significant weather risks.
Are leased solar panels covered by my homeowners insurance?
Generally, no — and that's actually in your favor. When you lease solar panels, the leasing company owns the equipment and is responsible for insuring it. However, you are still responsible for any roof damage, electrical damage, or liability claims connected to the panels on your property. Always review your lease agreement and share it with your insurance agent.
What happens if hail damages my solar panels?
Hail damage to rooftop-mounted solar panels is typically covered under your dwelling coverage as a standard peril. However, some insurers — particularly in hail-prone states — are adding wind and hail exclusions or higher deductibles for solar panels. Check your policy before installation and ask your insurer specifically about hail coverage for panels. Filing a claim will require photos, a professional inspection report, and weather data confirming the event.
Does homeowners insurance cover the cost to remove and reinstall solar panels for roof repairs?
This depends on your insurer and policy language. Some policies include the cost of panel removal and reinstallation as part of a covered roof repair claim, while others do not. Given that this cost can run $1,500 to $6,000 or more, it's worth asking your insurer directly — or looking for a policy endorsement that explicitly covers this scenario.