Solar panels and home insurance in Michigan work together better than most people expect. Panels mounted on your roof are usually covered as part of the house, and ground-mounted arrays as an "other structure." The problems come from what doesn't get updated: a dwelling limit that never grew to include a $20,000-plus system, a lease that requires coverage nobody checked, and an older roof that ends up under panels for the next 25 years.
The short version: Tell your agent before or right after installation, and send the contract. Raise your dwelling limit to include the system, check that your other-structures limit covers a ground mount, read your lease or power purchase agreement for insurance requirements, and don't put new panels on a roof that's near the end of its life.
How homeowners insurance covers solar panels
- Roof-mounted panels are usually treated as part of the dwelling (Coverage A), like any other fixture attached to the house. They're covered for the same causes of loss as your roof: wind, hail, fire, a falling tree.
- Ground-mounted panels are usually covered under "other structures" (Coverage B). That limit is often 10% of the dwelling limit and is shared with your detached garage, shed, fence and anything else not attached to the house. A large ground array can use up most of it.
- Forms vary by carrier. Some companies have specific rules or endorsements for solar, so confirm how yours treats it rather than assuming.
Raise your dwelling limit
This is the step people skip. A rooftop system adds real replacement cost to the house, but your Coverage A limit doesn't know that unless someone changes it. If the limit stays where it was, you've effectively lowered the coverage on everything else. And many policies cut even partial claims if the dwelling is insured for less than 80% of its replacement cost.
We already see a lot of Michigan homes insured below their rebuild cost: when we quote homes insured elsewhere, we've had to raise Coverage A by 30% or more on some of them. Adding solar on top of a limit that was already short makes it worse. Our post on whether your home is insured for enough to rebuild walks through how to check.
Leased panels and power purchase agreements
If you lease the system or buy its power under a power purchase agreement, you may not own the panels at all, and the contract decides who insures them. New York's state energy agency notes in its consumer guide that insurance is often handled through the lease or PPA, and that these agreements "may require homeowners to increase their homeowner's insurance." Read the insurance section of your contract and send it to your agent. Don't insure equipment you don't own as if you did, and don't assume the leasing company covers damage to your roof.
The roof under the panels is the real issue
Panels are designed to last decades. Your shingles may not. Removing and reinstalling panels so a roof can be replaced commonly costs a few thousand dollars on top of the roof itself; one national cost guide puts it around $2,800 to $4,800 for a typical system.
That matters for insurance, too. Roofs over 20 years old are becoming an underwriting problem with many carriers, and some companies settle older roofs on a payment schedule by roof age or on an actual cash value basis. If your roof is older, replacing it before the panels go on is usually the better order. See our posts on insuring a home with an older roof and getting credit for a new roof.
If you do have a roof claim later, ask your adjuster how the removal and reinstallation of the panels is being handled. It's a real cost on a roof claim with panels on top.
Hail, ice and Michigan winters
Solar modules are tested for hail. The IEC 61215 standard uses 25 mm ice balls, about an inch, fired at 23 meters per second, and certified panels survive that. Larger hail can still crack them, and hail and wind are covered causes of loss under a standard homeowners policy, subject to your deductible. Many Michigan homeowners now carry $1,000 to $2,500 deductibles, and some carriers apply a separate wind/hail deductible, so check yours before assuming a claim makes sense.
Two things a homeowners policy generally doesn't pay for: wear and tear, and the value of the electricity you didn't produce while the system was down. Some carriers offer equipment breakdown coverage that can respond to a failed inverter or electrical breakdown; ask whether yours does.
Michigan rules worth knowing
- Your utility can't require extra liability insurance for a home system. Under the Michigan Public Service Commission's interconnection rules, the utility "may not" require additional liability insurance for Level 1 (20 kW AC or less) and Level 2 projects, or require being named as an additional insured.
- More homes are adding solar. Michigan's 2023 clean energy law raised the cap on the utilities' distributed generation programs from 1% to 10%, effective February 27, 2024, with at least half reserved for systems of 20 kW or less.
- Property tax. Under a 2019 change to state law, residential solar that meets the size and production limits doesn't add to your home's assessed value until the property is sold, according to the State Tax Commission.
Frequently Asked Questions
Does homeowners insurance cover solar panels in Michigan?
Usually, yes. Roof-mounted panels are typically covered as part of the dwelling, and ground-mounted panels as other structures, for the same causes of loss as the rest of the house, like wind, hail and fire. Coverage varies by carrier, and leased panels may be the leasing company's responsibility, so confirm your policy and contract.
Do I need to tell my insurance company I installed solar panels?
Yes. The system adds replacement cost to your home, and your dwelling limit should be raised to include it. If it isn't, you may be underinsured on the whole house. Send your agent the installation contract.
Will solar panels raise my homeowners insurance premium?
Your premium may go up somewhat because you're insuring more replacement cost, which is the point: the coverage should match the house. Some carriers have specific underwriting rules for solar, so an independent agent can compare how different companies treat it.
Who insures leased solar panels?
The lease or power purchase agreement decides. Some leasing companies insure the equipment, and some agreements require you to carry or increase your own homeowners coverage. Read the insurance section of the contract and share it with your agent.
Does my Michigan utility require insurance to connect solar panels?
Not for a typical home system. Michigan Public Service Commission rules bar utilities from requiring additional liability insurance for Level 1 and Level 2 interconnections. Your homeowners liability coverage still applies to your property as usual.
The bottom line
Solar is a major home improvement, and your insurance should treat it like one: a higher dwelling limit, a roof that will outlast the panels, and a clear answer on who insures what if the system is leased.
J. Jacobs & Associates is an independent agency in Lake Orion that has insured Michigan homes since 1981. We represent more than twenty carriers, so we can check how different companies treat solar and older roofs and set your dwelling limit from a current rebuild estimate. Send us your declarations page and your solar contract, or call (248) 693-6455. You can also start a homeowners quote online.