Plugging Into Renewable Energy

Renewable energy sounds like a great way to make some extra money and a way to reduce your monthly hydro bill – but what are the insurance implications?

While homeowners policies specifically exclude income opportunities, your insurance company may insure renewable energy by way of an endorsement. Once you’ve been approved for the microFIT (Feed-in Tariff) or any other renewable energy program, you must contact your insurance broker to arrange the necessary insurance.

There are items to consider when insuring your renewable energy investment as each insurance company has its own requirements and set of rules. For example, some companies will only insure renewable energy if it’s owned and part of the microFIT program; while other companies will accept leasing arrangements. There is also the question of solar panels, wind turbines, bioenergy and waterpower, with each having their own specific rules.

Questions to ask your broker:

• Are the panels covered for physical damage?  Essentially, this depends on the type of homeowners policy you have, and the panels are usually covered for fire, lightning, windstorm, hail, theft, etc.
• What liability considerations should be made? We recommend increasing your home liability beyond $1M and/or obtaining an umbrella liability policy.
• If something happens to the grid or panels and I am no longer receiving an income, is there coverage for this? Yes there is (see below).
• What are the coverage limits? The coverage is based on your current insurance policy and the limits can be changed.  
• Does the value of my home increase? For insurance purposes – yes.  A new rebuilding cost will be calculated including the cost of the solar panels.
• What is the cost?  This varies by company but a premium per $100 of value.
• What is the deductible?  This depends on your current policy and this can be changed.
• If there is a claim in relation to the panels, will my home insurance go up? Generally speaking – no. With most companies, a claim related to the panels will not increase your homeowners insurance rates, but policies are always changing

When discussing the above with your broker, it’s important to know the amount of kWh (kilowatt per hour) your renewable energy will be creating and your expected income. Your policy will provide ‘loss of income’ coverage if there’s an insurable loss to your system and you’re no longer earning an income. If you’re already approved for microFIT, this information should be provided as well.  

In essence, contact us to confirm the renewable energy can be added to your policy, what implications fall on you and how to proceed with your new venture. We will review your policy’s coverages, limits and exclusions to ensure you have the right coverage in place and we will also discuss your arrangement with the insurance company to determine what is required to insure the renewable energy on your policy.