We’re here to bring you up to speed on what is happening with solar energy, insurance, and the interesting relationship. Pack your bags, it’ll be a ride!
Florida, as we know it, is the Sunshine State. While there are some cold fronts happening around us, we can still expect the warmth of the sun to shine through the clouds. While insurance agents have noticed a boom in rooftop solar panel installation across the state, including new insurance coverage for these panels is still novel and they are a bit unprepared for what’s to come next. We’ll give you some insight into solar energy in our state and how it impacts your homeowners insurance.
Solar capacity jumped by 57% in 2020 alone, the U.S. Energy Information Administration reported. Solar companies in Florida now top 700 individual entities. The boom appears to be the result of lower technology prices, rock-bottom interest rates and tax rebates. Even with inflationary causes and higher prices for materials, many homeowners do see a benefit with solar panels as an alternative energy form. The green movement has been a factor of the move to solar energy and in our state, why not? Well, there’s a bit more to the story.
More than 71,500 Florida properties had some type of solar installation by the first quarter of this year. That’s almost an eight-fold increase since 2017. But homeowners and some insurance agents may not be aware of the extra insurance requirements and costs involved in installing solar. This is due to a lack of history with Florida solar panel companies, the installation process, and how drilling holes in your roof can affect coverage.
Only a limited number of carriers in the Florida market will cover homes with solar panels. One of the largest private property insurers, Universal Property & Casualty, will provide coverage to solar roofs in most cases, with older roofs being in good condition. The great news is that we work with them and also have a solar section on our website!
Some companies may have no exclusions and will cover panels under the Coverage A section of homeowners’ policies. Others exclude the photovoltaic panels from damage caused by wind or hail. Florida insurers are already facing soaring roof replacement costs due to hurricane losses and excessive litigation.
Some other insurers may opt to not write policies for homes that sell excess power back to the power grid, which is in competition to the power companies. Florida requires solar systems above a certain generating capacity to carry a $1 million liability policy. A number of insurers have taken the position that a home that sells power back to the utility is actually a business, excluded from standard homeowners’ insurance.
Many carriers won’t cover that much liability with a standard homeowners’ policy or umbrella policy. It will probably take litigation and appeals court decisions to resolve what exactly is covered or should be covered. With many of these reasons, Florida Solar is a lot trickier for homeowners that want to be more green and clean.
What is more interesting is that a residential solar system can cost $30,000 to $50,000, much more than the cost of a roof. A $3,000 annual premium on a $250,000 home could increase by as much as $500. Insurance companies fear higher premiums could negate potential savings.
Solar photovoltaic systems in Florida have survived multiple hurricanes with minimal damage. Some solar companies will agree to cover the cost, and unfortunately others may not. Full replacement costs for roofs have added significantly to loss costs and premiums which make finding the right policy tough. Many property appraisers won’t consider solar panels as added value for the property, but the insurer must contemplate the full replacement cost.
What does this mean for the homeowner?
We love the sun; why not embrace it as a part of our home?
As of now, there is a lot to consider when looking into solar energy. With all this information, it is easy to say “maybe next year” on the subject. We are hopeful that more insurance companies and solar companies can work together on incentives for green homeowners that can be both cost effective and a worthwhile investment in a property. While we continue to monitor what is happening in this area of insurance, we expect to see a ton of action in defense of homeowners and lower costs. It may take a while but we have our hopes held high.
If you are moving forward with getting solar panels installed at your property, these are our recommendations:
- 1.Request your quote at www.harrisinsurance.com/solar
- 2.Send a copy of your current homeowners insurance declaration page to Service@HarrisInsurance.com. This is to confirm that your current carrier will allow for the panels as well as to confirm your starting liability limits. From here, we can either work with your current policyor start working on replacements with a company that accepts solar panels.
- 3.Once the homeowners policy is ready, we can start working on the excess liability policy to get you the 1M coverage that is required to initiatethe solar.
As always, please let our licensed Agents know how we can assist you with your Florida insurance needs. Call us at 850.244.2111, email at service@harrisinsurance.com, or request your quote here.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
