The demand for renewable energy solutions by homeowners - in particular solar panel installations – has increased considerably. This is on the back of Finance Minister Enoch Godongwana’s Budget Speech announcement of the National Treasury’s rebate scheme for new rooftop solar installations on private homes.
However, there appears to be confusion and uncertainty among some body corporate and homeowners associations (HOAs) when it comes to insuring solar installations.
“Some are not aware or have not been advised that it’s possible to cover solar panels under their existing building insurance policies,” says Hermanus van der Linde, chief executive of IntegriSure Brokers, provider of short-term, niche insurance products to the personal and commercial markets in South Africa.
Options
For body corporates and HOAs, options include insuring a fixed generator or a typical rooftop solar system by increasing the building sum insured with the replacement value of the system. This can be added to the Participation Quota (PQ) for each unit.
Van der Linde says the system will be fully covered for typical building risks such as hail, fire, impact and accidental damage.
Other cover options include:
- Increasing the power-surge and/or exterior theft first-loss limit to ensure that they are covered for all losses up to the chosen amount on a first-loss basis.
- Adding the solar system as a specified item with an additional premium payable, which includes full building cover without limitations on theft and power surge. In this instance, the system should be specified at the full replacement value.
Unit owners
Van der Linde says unit owners in residential estates or complexes need to get approval from their body corporates or HOAs when considering solar installations.
“This is a new subject matter to deal with, and there is the added complication of unprecedented load shedding. This makes it very important to add this insurance topic to the agenda at upcoming AGMs for members to understand the cover they will enjoy for solar panels. They also need to understand what is excluded and if there are any limitations.”
In some instances, body corporates or HOAs may not want to increase the sum insured.
Van der Linde says there has been some reluctance from some body corporates and HOAs to add installed solar panels to their building insurance, in spite of insistence from unit owners.
“If there is still resistance, residents and owners living in estates or complexes will need to take out cover for their solar panels on their personal policies. We have seen various cover options ranging from adding solar panels to household contents cover to specifying them as all risk items.”
Van der Linde cautions consumers, body corporates and HOAs to ensure that their solar systems are installed by accredited installers who are qualified to issue certificates of compliance.
“Insurance companies and manufacturers may reject claims if systems are not installed by accredited installers. Reputable installers should have liability cover, product liability and cover against defective workmanship. When contacting solar installers, ask to see their proof of liability cover,” says van der Linde.
If you plan to invest in renewable energy installations, ensure you are adequately insured by talking to your broker about the best product options for peace of mind – just in case something goes wrong.
Writer: Sarah-Jane Meyer