Adam Szabo was keen on the benefits of replacing his furnace with a heat pump and installing solar panels to help power his new electric heating and his electric car.
“It improves the value of the house, it’s better for the environment and … there’s a financial gain, as well,” said Szabo, who lives in Burlington, Ont., semi-detached house with his wife and nine-year-old daughter.
So it came as a big surprise that his insurance company, CAA, didn’t see things the same way — it nearly cancelled his home insurance over the heat pump installation, and then did cancel it, over the solar panels.
“I was confused, of course,” he said. “I’m like, ‘What do you mean?’ It just doesn’t make sense, right?”
Canadians are buying EVs and installing heat pumps and solar panels in their homes as part of the push to slow climate change and transition to cleaner forms of energy. But some are running into an unexpected hurdle: home insurance companies.
Szabo was one of a few people from across Canada with different insurance companies who contacted CBC News to share issues they’ve experienced with their home insurance after installing solar panels.
None were aware or warned that this could be a problem, and some, including Szabo, had additional insurance problems related to other green technology.
Szabo worries it could discourage homeowners from adopting cleaner technologies. He has even contacted his local MP about it, given that it undermines the federal government’s own climate goals and its target of net-zero emissions by 2050 along with related incentives to reach them.
Kevin Cowie of Aylesford, N.S., was shocked to experience a similar issue when he installed his solar panels four years ago.
“The federal government wants everyone to go greener, right?” he said. “Electric cars, solar panels, this and that — but the insurance companies aren’t there.”
What the insurance industry says
Szabo and Cowie both bought their insurance through brokers, neither of whom responded to interview requests from CBC News.
Szabo said he was told it was a new technology, and his insurance company wasn’t sure how much it would cost to insure — an explanation that surprised him, since solar panels have been around for decades, despite seeing a recent surge in popularity.
Rob de Pruis, a spokesperson for the Insurance Bureau of Canada, said every insurance company makes independent business decisions on what and how much they want to cover.
Some cover solar panels in their base policies, he said, while others include them in an add-on option called an endorsement. But he said it’s “not very common” for insurance companies not to insure homes with solar panels at all.
However, he said, solar panels not only add value to a house, pushing up its replacement value, but also pose potential risks.
“We’re dealing with power, and … changes to your existing electrical system.”
He added that some solar panels are installed in a way that can allow them rip off and cause damage during a storm. (Most solar panel installations in North America are designed to withstand winds of 225 km/h, similar to a Category 4 hurricane.) The panels themselves can also be damaged by hail.
Echoing what Szabo was told, de Pruis said many insurance companies don’t have a lot of claims experience yet with solar panels and some other green technologies. They hesitate when they’re not sure how much future claims could cost them.
When asked if the Insurance Bureau of Canada is doing anything to help, he said the competitive nature of the insurance industry means it’s not able to aggregate and share risk information. He encourages the solar industry (and other clean-tech industries) to share their independent research with the insurance sector to speed things up.
Advice for customers who want to go green
De Pruis said people shouldn’t make assumptions about how changes to their homes will alter their insurance — nor should they give up if one company denies them coverage.
“That doesn’t mean that coverage is not available in the market,” he said. “So it’s making sure that you shop around and ask those questions and do your research.”
De Pruis acknowledged that providing more information can sometimes work, too.
For Szabo, though he managed to convince his insurance company to maintain coverage of his home — after sending all the specs for his heat pump and backup system — the solar panels were subsequently a dealbreaker.
Electric and climate-friendly heat pumps are replacing oil tanks for home heating on the East Coast, likely thanks to provincial government incentives in New Brunswick, Nova Scotia and P.E.I.
Some home insurance options for solar panels
Both Szabo’s and Cowie’s insurance brokers managed to find them home insurance with Pembridge Insurance Company, which is backed by Allstate Canada. Allstate told CBC News that its property policies include up to $60,000 in coverage for the replacement cost of solar panels.
Meanwhile, CAA said it provides some coverage for homes with solar panels, but wouldn’t offer any specifics.
Cowie’s insurer, Aviva Canada, said it has been insuring homeowners with solar panels through an add-on since 2011. It wasn’t clear why Cowie, along with another reader who contacted us, were both denied home insurance with Aviva through their brokers around 2020.
However, Aviva said it is updating its base policy to offer up to $100,000 coverage with no add-ons required for renewable energy equipment, including solar panels, starting October in most of Canada, and March 2025 in Quebec.
Szabo thinks more insurance companies need to get on board with the bigger energy transition.
“They should be on top of this.… They should embrace change and not try to fight it.”
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