TAMPA, Fla. — With Florida's insurance market still in flux, some companies are becoming even more risk-averse. Experts in the field told ABC Action News reporter Michael Paluska that solar panels are coming under increased scrutiny.
Depending on your carrier, solar panels might lead to dropped coverage and an increase in your premium or exclude different coverages like wind.
"We use probably two and a half times the amount of electricity as a normal home does," homeowner Alex Jandick said. "We have two electric vehicles, we keep the AC at 72 in summer. I love a nice cold house. I love driving my electric cars. So, we do it a little bit differently than the average household. But we're still saving a considerable amount of money with the solar each month compared to what it would be just paying Duke all the money for the energy."
When Jandick decided to install solar on his Pinellas County home, he added as many panels as possible without going overboard.
"If we added more panels, we'd go into the Tier 2 system range. In that case, it would need to be insured through the homeowner's insurance," Jandick said. "This is where I had to educate myself on solar and through a lot of Reddit forums, going back and forth with people in Facebook groups. I emailed our insurance agent. I said, 'Hey, I don't want to add this to our policies. I don't want to insure this. But will it be a problem with the carrier?' And they said, 'No, it won't be.'"
According to the Florida Public Service Commission, a solar system is considered Tier 2 if the gross power rating is greater than 10 kilowatts and less than or equal to 100kW.
In Hillsborough County, we met with homeowner Tristan Siegel. Siegel has a Tier 2 system. Insurance can be required when you get into that range.
"For the Tier 2 system, what folks aren't understanding or they're not being told, once you hit that point, it could require a million dollar umbrella on your property," Bryant Dunivan, a Consumer Protection attorney, said.
That is something Siegel was aware of.
"I have 34 kilowatts, which is enough to power probably three houses, maybe more, and I could probably power my whole street," Siegel said. "As far as I can tell, the solar had no impact whatsoever, neither up nor down on my premium. As a factual matter, after I put in this massive solar array, my homeowner's insurance dropped by $1,000 a month. So instead of $4,800, I'm now paying $3,700."
That is not the norm. According to numbers crunched by a local insurance agent for ABC Action News, adding panels can increase premiums. For example, a resident who added 69 solar panels was recently quoted with a more than $3,000 increase.
"I was very careful. I called the insurance company before, during and after and I called TECO before, during and after and told them exactly what I was doing," Siegel said. "They were very transparent with me. They said, you do have coverage, it's part of your policy, and you have enough liability for the size system I had. They said, look, you've got a multimillion-dollar home; you already have this million dollars of insurance liability. It's already baked in. So you don't have to do anything."
"Florida residential insurers have been more stringent in their underwriting when it comes to solar panels. And now we are hearing that some companies have stopped writing the coverage or increasing rates for the coverage," Mark Friedlander, the Florida Spokesperson for the Insurance Information Institute, said. "The reason why this is now facing scrutiny in Florida, why are Florida insurers raising a red flag when it comes to solar panels, is because solar panels in Florida are vulnerable to severe wind events, like hurricanes, tropical storms and severe convective storms that we could see all year round here in Florida."
Friedlander said customers should call their insurance agent and shop around.
"Companies are still writing this. It's individual insurance decisions. It's not a blanket industry issue, per se. It's individual companies making decisions," Friedlander said.
One option for consumers is to join a solar co-op.
Dual co-ops inPinellas and Hillsborough launched on leap day.
"It can be confusing. Solar United Neighbors is dedicated to education and consumer protection," Julia Herbst, the Florida Gulf Coast Program Associate for the non-profit, said. "Because solar is very, very safe. It's very straightforward. It's highly regulated. So we want to make it clear how solar works and how it works for your house or family. It's not for really wealthy people only. We think solar is for everybody, people who are struggling to pay their bills we want, we make it more affordable and accessible."
"Big picture: We have a homeowner's insurance crisis in Florida, just in general. Solar, as a part of that, is a very, very small blip on the horizon. So that's fortunate," Herbst said.
Regarding the added insurance cost for a Tier 2 system, Herbst said don't overthink it.
"This is just a simple umbrella policy. Don't overcomplicate it. A lot of people may already have an umbrella policy. It should only be a couple of hundred dollars a year," Herbst said.
Going solar can lead to energy independence. But, it can also lead to some common pitfalls. Dunivan said if something about solar sounds too good to be true, it probably is.
"Customers are told, 'You're not going to have an electric bill. You're going to get a large amount of money from the government that you can use.' Then they find out they won't get the tax incentive; they have a loan they didn't know about. So that's where it really kind of shows its underbelly," Dunivan said.
"Is solar the wild west of energy?" Paluska asked.
"Nowadays," Dunivan said.
"The key is how they go about selling it. There needs to be clear disclosures. Every transaction when you finance something, you get a Truth in Lending Disclosure, having them put it on a single page. This is how many panels it is. This is what you're looking at in terms of the system. Are you going to need the umbrella policy? Are you not? Can you afford to pay it, some type of regulation that looks at someone's ability to repay it? From the larger picture, you're dealing with a variable energy cost, you're dealing with folks who are sometimes on a fixed income, they're just retiring or have been retired. They're trying to bring down the overhead. And now, when they get in the solar conundrum, you've got a fixed payment to a solar panel company. But you also have a utility bill that may stay the same."
The best advice is to do your homework.
"If you don't do the upfront research, be prepared to get dinged in terms of insurance carriers in Florida. You have to find the right fit with a good insurance agent that works for you, not against you," Jandick said. "It's months and months of research and homework and figuring out what the people who had a successful time are doing and just copying that."
