Thinking of renting a solar power system?
Five insurance questions answered
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YOU don’t have to pay a fortune to install a solar power system – homeowners can now rent one. It’s more practical and makes more financial sense to rent as you’re not responsible for installing it yourself and usually don’t have to worry about maintenance.
Rental companies offer various options so you need to compare them and see what suits your needs.
Your Money asked Sumarie Greybe from digital insurance platform Naked to answer five questions about rented solar power systems.
1 WHO IS RESPONSIBLE FOR INSURANCE?
Typically, the person renting the solar power system, unless the contract states otherwise. This responsibility begins once the system is installed, which means you bear the risk of damage and theft once it’s operational.
It’s important to read the agreement with the rental company carefully. For example, check if the rental company’s insurance covers damage or loss during transportation and installation. If you’re unsure, ask your insurance provider to review the agreement so you have the right coverage.
Also, ask your insurer about their accreditation requirements for the installer. It’s important that the installer has the correct certification and complies with municipal requirements.
Insurers are strict about this because poor workmanship can result in a fire hazard. Make sure you get a compliance certificate indicating that all safety conditions have been met.
2 DOES IT WORK DIFFERENTLY 2 FOR STANDALONE HOUSES AND SECTIONAL TITLES?
Building insurance often provides coverage for solar power systems. Even if you’re renting, the entire system is part of your property. The value of the inverter or batteries is added to the value of the solar power system under the building coverage if it’s connected to the installed solar power system.
S If you own a standalone house, add the value of the system to your building insurance policy. You may be able to do this on your insurer’s app.
S If you’re renting, and the owner installs the system, they’re usually responsible since it’s part of building coverage.
S If you’re the owner or tenant of a sectional title, the body corporate usually takes out building insurance on behalf of all the owners. The sectional title unit owner can request that the insured amount of the unit’s building coverage be increased specifically to cover the solar power system. Ask for written confirmation of your cover.
3 WHAT IS COVERED?
Repair or replacement of the panels and other components that are damaged, stolen or destroyed, provided it is the result of an insurable event such as theft, fire or adverse weather conditions. Risks for solar panels can include:
S Solar panel theft, which is on the rise due to the increasing value, availability and demand for them.
S Vandalism that damages and destroys solar systems.
S Weather damage such as storms or hail.
Check if personal liability is also covered under the building insurance. This is when an accident related to your property’s solar panels injures someone or damages their property.
For example, if there’s a short circuit in the wiring that’s not the fault of the manufacturer or installer and it causes a fire that damages your neighbour’s property, such a claim may be covered by personal liability insurance.
4 WHAT IS NOT COVERED?
Wear and tear, service and maintenance-related claims. These should be covered under your supplier’s warranty and service agreements. Your insurer will not cover anything covered by a warranty.
It’s your duty to understand what the rental company accepts responsibility for under their warranty and service agreement. Ideally, this should be outlined in a written contract.
Ask if there’s a comprehensive warranty covering all parts. Your service provider should do everything in its power to keep the system up and running.
Ask what warranty the rental company provides to getting your system working again in case of a technical fault. You should also inquire whether they have spare parts readily available to ensure a quick repair.
5 WHAT IF IT NEEDS TO BE REPLACED?
The system should be insured for the full replacement cost, even if you’re renting, in case it’s destroyed. The insured v alue should include the cost of installation. Remember to check with the supplier annually about the replacement value of the system as it may fluctuate. Ensure you adjust your insured value accordingly.