Rental solar systems and insurance — are you covered?
Article supplied by Naked
Solar power is taking off in South Africa, with Eskom estimating that installed rooftop solar has increased from 983 MW in March 2022 to 4.4GW in June this year. Affordable rental solutions mean that even homeowners who don’t have a couple of hundred thousand rand spare to buy batteries, panels and an inverter can say goodbye to loadshedding and delete Eskom-se-push.
If you’re renting a solar system, it’s worth remembering that you are most likely responsible for insuring it. Your contract with the rental company might specify that you need to cover the whole system from the installation date. The risk of loss or damage then falls on your shoulders – if the solar system gets damaged, destroyed or stolen, it’ll hit your pocket.
Sumarie Greybe, co-founder of digital insurance platform, Naked, says that rented solar systems will usually need to be covered under your home building policy. This policy will pay for the repair or replacement of the panels and other components if they’re destroyed, stolen or damaged in an insurable event. Insurable events include theft, fires, and weather (storms or wind, for example).
Insurance will also protect you from personal liability if an accident related to the solar panels hurts someone else or damages their property. For example, if there is a short circuit in your wiring that is not the manufacturer or installer’s fault or an ‘act of God’ that causes a fire that in turn damages your neighbour’s property. It will, however, not cover wear-and-tear or service and maintenance-related issues — these should be covered under your supplier’s warranty and service agreements,” says Greybe.
Here are some of her top tips for getting the right insurance for your rented solar system:
Rent from a credible company
Insurers are strict about compliance, so ensure that your solar provider has the correct certifications and gets the necessary paperwork from your municipality. Insurance companies will want to see that you haven’t exposed yourself to unnecessary risk by being reckless or negligent – for example, installing a system with faulty wiring that could be a fire hazard.
Check your agreement carefully
“Many, but not all, solar rental companies expect you to insure the system,” says Greybe. “Read the agreement carefully to make sure you get the cover you need, but without paying for overlapping coverage. If the rental company’s insurance covers damage or loss during transportation and installation, your policy only needs to start after the installation is done.”
Getting insurance
If you own a freestanding home, you can simply add the value of the system to your building insurance policy. The system is a fixture in your home, even though you don’t own it. If you live in (or rent) a sectional title, your body corporate usually buys building insurance on behalf of all owners. You can ask your managing agent or body corporate to increase the sum insured of your unit’s building cover to explicitly cover your solar system. Ask for written confirmation to ensure you’re covered.
Insure for the full replacement cost
Greybe says it’s important to insure the solar system for the full cost of replacing it if it had to be completely destroyed. You should include the installation costs in your estimate of its insured value. Be sure to adjust the cover each year to cater for inflation, making a point to check the latest installation and equipment costs before you do so.
Understand the warranty and service level agreement
Check your agreement to understand what your provider will commit to doing in terms of maintenance and support. Is there a full warranty for the physical components of the system since insurance doesn’t cover wear-and-tear and deterioration? And what guarantees will they make to get your system up and running again in the event of a technical fault?
Don’t get caught out by the excess
Most policies have an excess — an amount you’ll need to pay towards repairs or replacement if you need to claim. A higher excess typically means lower premiums, but you’ll have to pay more out of your pocket if you claim. “Try to find a balance that makes your monthly premium affordable, yet doesn’t leave you in a tight financial spot if something bad happens,” Greybe advises.
