Solar panels and home insurance in Canada

Adding solar panels changes your home, and your home insurance needs to know about it. Most Canadians who install solar have no trouble with coverage, but some have been surprised by higher premiums, size limits or, occasionally, a refusal. The time to sort this out is before you sign an installation contract, not after a hailstorm. This guide covers what to check and what to ask. It is general information only, so confirm the details with your own insurer or broker.

Tell your insurer before you install

Rooftop solar is a permanent change to the building. It adds value that would need to be rebuilt after a loss, and it changes the risk your insurer is covering.

The Insurance Bureau of Canada has said that coverage problems after installing solar are rare, but has warned homeowners not to assume their policy covers panels automatically. Brokers say the same: if you don't disclose the system, a later claim could be complicated or denied.

The simplest approach is to call your insurer or broker when you have a quote in hand. Tell them the system size, whether it is roof- or ground-mounted, the installed cost, and whether you will be on net metering.

Insurers have different rules

There is no single industry rule for solar. Canadian news reports have described homeowners finding that:

• Some insurers add panels with a small premium increase and no fuss.
• Some cap the system size or value they will cover.
• Some are wary of systems that send power to the grid under net metering or net billing.
• Some charge noticeably more, and a few decline.

If your current insurer is difficult, it is worth shopping around. A broker can compare several companies at once. Keep in mind that switching insurers may affect bundling discounts on your car or other policies.

What coverage to check

The panels themselves

Roof-mounted panels are usually treated as part of the dwelling, so they fall under your building coverage. Ground-mounted arrays may fall under detached structures or "other structures" coverage, which often has a lower limit.

Ask about:

• Dwelling limit. Your rebuild cost should include the replacement cost of the system. You may need to raise the limit.
• Named perils vs all-risk. All-risk (comprehensive) policies cover more types of damage. Check that hail, wind, falling trees, fire and lightning are covered.
• Deductible. A hail claim for a few panels may fall below your deductible.
• Leased or financed panels. If you don't own the system outright, the lease or financing company may require specific coverage or carry its own. Read the agreement and tell your insurer who owns the equipment.

Liability

Your liability coverage protects you if someone is hurt or a neighbour's property is damaged. For solar, the realistic scenarios are things like snow sliding off panels onto a person or car, or a panel coming loose in a severe windstorm. A professionally installed system with a permit and electrical inspection lowers these risks. Ask your insurer whether your liability limit is adequate and whether anything about solar affects it.

Roof claims

Panels and roofs are linked. Questions to settle:

• Roof age. Some insurers are cautious about older roofs. Installing on an aging roof can create problems for both the roof and the panels. See replacing your roof before solar.
• Removal and reinstallation. If the roof is damaged and must be replaced, will the policy pay to remove and reinstall the panels? This can add thousands to a claim.
• Leaks. A leak around a roof attachment may be treated as an installation defect rather than an insured loss. That is where your installer's workmanship warranty matters. See solar warranties explained.

What insurers usually want to see

Having these ready makes the conversation easier:

• The signed contract or final invoice showing system size and cost.
• The building permit (if your municipality requires one) and the electrical inspection certificate.
• Proof the installer is licensed and insured.
• Panel and inverter model numbers and certifications.
• Your utility's connection or net metering approval.

A professionally installed, permitted and inspected system is the easiest kind to insure. A do-it-yourself or uninspected system can be much harder.

Questions to ask your insurer or broker

1. Do you cover rooftop solar, and is there a size or value limit?
2. Will my premium change, and by roughly how much?
3. Does it matter if I am on net metering?
4. Will the panels be covered under my dwelling limit, and should I increase it?
5. Are hail and wind damage to panels covered, and what is my deductible?
6. If my roof needs replacing after a covered loss, are panel removal and reinstallation included?
7. How are leased or financed panels handled?
8. Do I need to send you any documents after installation?

Get the answers in writing, or ask for the policy wording that applies.

The bottom line

Insurance is rarely a deal-breaker for solar, but it is a cost and a paperwork step to plan for. Ask before you sign, include any premium increase in your payback math, and keep your installation documents somewhere safe.

Next step

See whether solar pays off on your home before you call your insurer: check your roof.

Common questions

Do I need to tell my home insurer about solar panels?

Yes. Solar is a permanent change to your home, and not disclosing it could complicate a claim. Call your insurer or broker before you install.

Will solar panels raise my home insurance premium?

Often a little, because your home's rebuild value goes up. Insurers set their own rules, so ask for a figure and shop around if it seems high.

Does home insurance cover hail damage to solar panels?

Many policies do if the panels are declared and your coverage includes hail. Check your policy wording and your deductible.

Can an insurer refuse coverage because of solar panels?

It happens occasionally, for example over system size or net metering. If that happens, a broker can help you compare other insurers.

Sources

• CTV News: Coverage denied, Canadians hitting roadblocks with insurers after installing solar panels
• Insurance Business Canada: Solar panels and home insurance, what should your clients know (2024)