The announcement by Finance Minister Enoch Godongwana of the National Treasury’s rebate plan for new rooftop solar installations on private residences beginning 1 March 2023 has increased demand for renewable energy solutions by homeowners, particularly solar panel installations.
The quick increase of solar has caused some uncertainty among body corporates and homeowners associations (HOAs) in estates and complexes regarding the obligations of insuring the installations, according to Hermanus van der Linde, chief executive of short-term insurance broker Integrisure.
According to Van der Linde, several body corporates and HOAs are unaware or have been instructed that they may cover solar panels under their existing building insurance coverage with little consequences.
Some are unwilling to take up the insurance themselves, leaving it up to individual owners to obtain insurance.
Other market possibilities for body corporates and HOAs include insuring a standard rooftop solar system or stationary generator by raising the building sum covered with the system’s replacement value, which may be added to the Participation Quota (PQ).
“The system will be covered in full for typical building risks such as fire, hail, impact and accidental damage,” van der Linde said.
Increase the power-surge and/or exterior theft first-loss limits to guarantee that they are protected for all losses up to the set amount on a first-loss basis.
Another market option is to include the solar system as a defined item with an extra premium payment, which covers complete building insurance without limits on theft and power surge.
“In this instance, the system should be specified at full replacement value,” he said.
People who live in residential estates or complexes must acquire permission from body corporates or homeowners’ organisations before installing solar.
“As this is a new subject matter to deal with, combined with the current reality of unprecedented load shedding, it is very important to add this insurance matter to the agenda at upcoming AGMs for members to understand the cover they will enjoy for solar panels, what it excludes and if there are any limitations.”
According to Van der Linde, insurers are already experiencing resistance from body corporates and HOAs to include solar panels in their building insurance; nonetheless, he believes that owners should insist on it.
If there is still opposition, residents and owners residing in estates or complexes will need to add solar panel coverage to their personal policy.
“We have seen various cover options in the market ranging from adding these solar panels to contents cover to specifying it as an all-risk item.”
Van der Linde warns consumers, as well as body corporates and homeowners associations, to ensure that solar systems are installed by a qualified, accredited installer who can issue a certificate of compliance, because insurance companies and manufacturers may reject claims if the system is not installed by an accredited installer.
“Reputable installers should have liability cover, product liability and cover against defective workmanship. When contacting solar installers, ask to see their proof of liability cover.”
“We will continue to keep a close eye on the market for further trends and developments on this front and remain committed to providing comprehensive advice on the best insurance solutions for solar panels.”
“If you plan on investing in renewable energy installations, ensure that you are adequately insured by talking to your broker for the best product options for peace of mind should something go wrong,” he said.
