State Farm won't insure my solar panels

[J.P.M.]

I built a new home last year that includes rooftop solar power, which I intentionally oversized to accommodate recharging a possible electric vehicle in the future. According to my electric bills, during the last year I've generated about 180% of my actual electric usage, with the excess bought back by my commercial power provider via net-metering. Great! (Or so I thought.)

My homeowners insurance is coming up for renewal soon. Unfortunately, my carrier State Farm notified me last month that, as of October 1 for all new policies written in the US, they will no longer cover the loss of, or liability from, "systems and equipment used to generate electrical power exceeding 125% of the actual power usage by the residential premises in the 12-month period prior to the date of the loss...", leaving my 180% system totally unprotected. Note that there won't even be pro-rated coverage for that portion of the system under 125%: according to my agent, if my house burns down and destroys my panels and inverter, State Farm will not pay to replace any portion of that equipment. More troubling, I will also have no liability coverage if my solar somehow damages the commercial grid or injures someone. And per my agent, State Farm offers no riders or add-on policies that would cover my situation. While I might consider self-insuring against loss of the solar hardware, I certainly don't want to be exposed to potential liability claims

So I'm resigned to searching for new homeowners insurance. My worry is that since State Farm is a major national carrier, they may just be the first in a wave of insurers that intend to restrict or eliminate solar coverage. I (almost) wonder if there isn't a conspiracy between Big Insurance and Big Utilities to stifle the spread of robust home power generation!

More of the joys that oversizing an array brings.

[renormalize]

I'm really surprised your PoCo allowed a residential net metering connection which was expected to generate more than 100-120% of historical usage. When I was sizing my system none of the installers in NJ would go above ~120%. Are you getting better than the wholesale generation rate (aka ~$0.04/kWh) on your true-up anniversary date?

Honestly I'm not entirely surprised that State Farm (and likely other) insurers would deny coverage of such a PV system under their residential homeowners policy -- since such a system borders on commercial generation. How many total DC kW are we talking about?

The PV system size is 6.9kW (21 panels) for my 2700 sq. ft. house. Note that the home was new custom construction, so there was no historical consumption data available. And having never lived here before, I had no personal consumption history appropriate to this area. Instead, my solar contractor used rules-of-thumb to forecast the demand and then we oversized for the future EV. But we honestly had no way of knowing for sure whether we'd end up at 110% or 200% or somewhere in between.

[J.P.M.]

The PV system size is 6.9kW (21 panels) for my 2700 sq. ft. house. Note that the home was new custom construction, so there was no historical consumption data available. And having never lived here before, I had no personal consumption history appropriate to this area. Instead, my solar contractor used rules-of-thumb to forecast the demand and then we oversized for the future EV. But we honestly had no way of knowing for sure whether we'd end up at 110% or 200% or somewhere in between.

Oversized or not, and despite how you got to this point, the situation is what it is. Depending on how selective home insurers in your area are, I'd look around for another insurer. If that search comes up empty, then desize the array "temporarily" or permanently by system mods. Seems like increasing use would be a less/least desirable alternative, but would be a viable/necessary/possible wayto play the game for a yr. or so.

I'd also suggest this situation, given State Farm's size, may not be unknown to experienced vendors in the area. Maybe your vendor dropped the ball ??

[sensij]

My real concern is liability coverage. As I understand it, if (for example) a worker on my roof were injured or electrocuted by coming into contact with the usual supply feed from my power company, my insurance would kick in. But if he's injured by accidentally contacting my solar equipment, my insurance would pay nothing. That's the scenario I worry about.

How often do you have workers on your roof? When you do, are you using contractors with workman's comp and liability insurance? I'm no insurance guru, but if it was me in your shoes, I'd have a hard time coming up with a realistic scenario in which I'd have any risk of liability that I'd pay to insure against. I'd still be looking for a new policy, as you are, but for me, it would be more about signaling back to state farm that this rule will cost them business.

Also, I agree with the idea that *proving* which side of 125% the system is on could be really hard for a wide range around that value (as you touched on in your Bogleheads thread). How do you account for self-consumption? I have months on my system where I was without internet and no record of what the system produced exists. They would have to estimate production by some standard method, I guess, but their statement doesn't feel very thought out. Even using "power" instead of "energy" adds an unnecessary layer of interpretation to the rule.

[JSchnee21]

Thanks for the info renormalize Congrats on being so energy efficient! 6.9kW is a very reasonably/modestly sized PV system -- especially for a 2700 sqft home. I take it you don't use the air conditioner very much or it's pretty cool/cold where you live (and yet still rather sunny).

Have you considered mining bitcoins? Growing "plants" in your basement / attic? Buying a large pool pump / fountain / Hot tub / Jacuzzi ? Extravagant holiday light show? All great ways to run up your electric bill

By all means start planning for your electric vehicle -- AS IS you're giving most of those electrons back to the PoCo for free (or nearly so) -- so at least you could save on gas (if you have a long commute).

[renormalize]

I'd also suggest this situation, given State Farm's size, may not be unknown to experienced vendors in the area. Maybe your vendor dropped the ball ??

If by "vendor" you mean my solar contractor, they were as surprised as me when I informed them of the 125% restriction. This is apparently brand new for State Farm policies nationally starting October 1. And I worry it's the wave of the future for all home insurers.

[J.P.M.]

If by "vendor" you mean my solar contractor, they were as surprised as me when I informed them of the 125% restriction. This is apparently brand new for State Farm policies nationally starting October 1. And I worry it's the wave of the future for all home insurers.

Yes, by vendor I mean your solar contractor. I'm no insurance guru either, but I've not heard of such a trend in CA, at least not yet.

While I think it's foolish from a financial point of view to oversize arrays, particularly when so many tools are available to avoid the waste from oversizing that's borne of ignorance, my libertarian streak sure wouldn't like limits imposed on my freedom to make even poor choices, particularly when imposed by a bunch of insurance slugs who know less than nothing about most things, and less than that about PV or residential energy use.

[JRBlak100]

I built a new home last year that includes rooftop solar power, which I intentionally oversized to accommodate recharging a possible electric vehicle in the future. According to my electric bills, during the last year I've generated about 180% of my actual electric usage, with the excess bought back by my commercial power provider via net-metering. Great! (Or so I thought.)

My homeowners insurance is coming up for renewal soon. Unfortunately, my carrier State Farm notified me last month that, as of October 1 for all new policies written in the US, they will no longer cover the loss of, or liability from, "systems and equipment used to generate electrical power exceeding 125% of the actual power usage by the residential premises in the 12-month period prior to the date of the loss...", leaving my 180% system totally unprotected. Note that there won't even be pro-rated coverage for that portion of the system under 125%: according to my agent, if my house burns down and destroys my panels and inverter, State Farm will not pay to replace any portion of that equipment. More troubling, I will also have no liability coverage if my solar somehow damages the commercial grid or injures someone. And per my agent, State Farm offers no riders or add-on policies that would cover my situation. While I might consider self-insuring against loss of the solar hardware, I certainly don't want to be exposed to potential liability claims

So I'm resigned to searching for new homeowners insurance. My worry is that since State Farm is a major national carrier, they may just be the first in a wave of insurers that intend to restrict or eliminate solar coverage. I (almost) wonder if there isn't a conspiracy between Big Insurance and Big Utilities to stifle the spread of robust home power generation!

It has been almost two years since Renormalize posted this message. I am wondering what you (Renormalize) found as a solution. I find myself in a similar position with State Farm.

After having my solar system installed, I decided to replace my swimming pool pump with an energy efficient model. This, coupled with a mild Texas summer, has caused my solar production to possibly exceed the 125% threshold State Farm set.

[renormalize]

JRBlak100, in fall 2017 I contacted a half-dozen different home insurers for coverage estimates. Unlike State Farm, all the insurers I talked to offered full coverage for my solar installation without restrictions on my generation. I ended up using Travelers home insurance for the past two years with no complaints (but will probably get another round of estimates when my policy comes up for renewal next month). So I think you should have no problem finding an insurer for your situation.

[azdave]

If you read the below thread you'll see I also ended up with that same problem of having solar panels and State Farm for home insurance. My electric usage dropped significantly a few years after going solar (kids move out when they get older and wife working away from home instead of at home now). Because of the over-production, State Farm invalidated my insurance coverage for the panels entirely claiming I must be in the business of selling power for profit if I over-generate only once in a 12-month period. What a joke!

I switched to Liberty Mutual and found a lower rate while adding additional coverage. It does NOT pay to stay loyal to the same company for nearly 40 years. State Farm lost coverage on my home, my 7 cars, 3 trailers and my life insurance over that issue. No one from State Farm even called to ask why I left them after all those years.

https://www.solarpaneltalk.com/forum/solar/the-pros-and-cons-of-solar-energy/378254-home-insurer-revises-policy-on-residential-solar-panels

[bcroe]

Because of the over-production, State Farm invalidated my insurance coverage for the panels entirely claiming I must be in the business of selling power for profit if I over-generate only once in a 12-month period. What a joke!

Seems like panels are property to be insured, what does production have to do with it? How
would they even know? I over produce every year, no one notifies me, I have to figure it out
myself.

A cheap 7.5KW electric heater could be turned on a set number of hours to knock off a number
of KWH if needed. Bruce Roe

[azdave]

Seems like panels are property to be insured, what does production have to do with it? How
would they even know? I over produce every year, no one notifies me, I have to figure it out
myself.

I'm sure the goal was that State Farm did not want to insure commercial solar panels in a residential setting (and I understand that) but they way they went about wording it in the fine print excluded coverage for my system with only the slightest over-production in a single month out of the last 12 months before a loss occurred.

How would they find out about it? I guarantee you that if I had a claim to replace or repair the PV system they would ask me to prove that I had not violated the over-production clause in my coverage and I would have to allow them to see my utility records. Employees who process claims are rewarded generously for finding the small print that avoids large payouts.I have no doubt they would deny coverage if they had the ability.

It doesn't matter now since I changed insurers. I know I could have just burned up the extra electricity each month but what's the point of that? That's just agreeing to be senseless like they are. As it averages out, we get about $9 a month account credit for the over-production. Does that sound like a commercial business enterprise to anyone? Their decision cost them about $4000 a year in premiums just from me but I guess they don't miss that income.

[Markyrocks69]

If you read the below thread you'll see I also ended up with that same problem of having solar panels and State Farm for home insurance. My electric usage dropped significantly a few years after going solar (kids move out when they get older and wife working away from home instead of at home now). Because of the over-production, State Farm invalidated my insurance coverage for the panels entirely claiming I must be in the business of selling power for profit if I over-generate only once in a 12-month period. What a joke!

I switched to Liberty Mutual and found a lower rate while adding additional coverage. It does NOT pay to stay loyal to the same company for nearly 40 years. State Farm lost coverage on my home, my 7 cars, 3 trailers and my life insurance over that issue. No one from State Farm even called to ask why I left them after all those years.

https://www.solarpaneltalk.com/forum/solar/the-pros-and-cons-of-solar-energy/378254-home-insurer-revises-policy-on-residential-solar-panels

State farm is terrible, I had an issue with them earlier this year that I was damn near ready to tell them where to shove it. It was completely unrelated to solar. But they did one of their inspections like a year and a half ago. They had a couple problems, I dealt with them. My agent told us to take pictures and send them to him and he'd get back to us if there was a problem... a year went by and we got a letter saying we had unresolved issues from the previous year and they were dropping us.... I lost my mind. Then it took a month or so and many phone calls to fix. I've been a customer for over 10 years and I'm like they obviously don't care about our business. I told my agent he needs to fix this mess bc we can always go elsewhere. I cant wait until I make the call to have my system insured which is coming very soon. They are on my last nerves tho. They act like they're doing us a favor for insuring our stuff.... like the thousands and thousands we send them means nothing.

[J.P.M.]

State farm is terrible,

Is there a good insurance company ? Less crappy maybe, but good is not a word I'd use.

[Markyrocks69]

Is there a good insurance company ? Less crappy maybe, but good is not a word I'd use.

I have no clue but good or bad is one thing but being woefully poorly managed is something entirely different all together. I actually just called my agents office about questions I had and was told that I should have asked these questions b4 the install. I responded that idk why everytime I call I'm met with an attitude.... im not going to let the insurance company dictate my life. that if you don't insure them up to my standards I'll just go elsewhere. It's none of this phone boy lackeys business when I ask these questions, take my message, shutup and do your job...I didn't call and ask his opinion on when I should be asking questions. Kma, man did that really piss me off. Literally everytime I call I'm like ready for a battle.