Solar panels have gained significant popularity recently, particularly due to the increasing need for security of electrical supply in South Africa. There is also a focus on renewable energy sources.
If you are considering installing solar panels on your property in a sectional title scheme, it is essential to understand how to insure it properly. This article will provide you with a better idea of what to ask your broker when seeking out the most appropriate coverage for your solar system , given the individual scheme circumstances.
Permanent structure and ownership
Solar panels installed on the roof of a sectional title schemes are typically considered permanent structures, unless otherwise stated as being moveable. Assuming you have obtained the necessary permissions and compliance in line with body corporate rules, these panels, along with the batteries and inverter, will then usually become or form part of the buildings. It’s important to note that, by default, while the panels are on the roof, they are considered common property belonging to all owners, but the batteries and inverter within your section are solely yours.
Insurance coverage for solar panels
Insuring your solar panels is relatively straightforward. Depending on the insurance policy and its specific terms, you can choose to cover the panels as part of the building for normal perils, excluding theft. This coverage typically includes risks like fire and storm damage and is covered under a normal buildings rate, which is generally affordable, usually around R10 per R100,000 sum insured per month. Theft cover can be included for a higher premium, depending on the insurance company and their particular pricing models. In all cases, one should advise the insurer of the added solar panels and ancillary equipment as the risk of the building may be considered by the underwriters, to have changed.
Differentiating common property and section coverage
To ensure accurate coverage, it is important to differentiate between the panels on the roof (common property) and the batteries and inverters within your section. The insurance policy should reflect these distinctions, allocating the appropriate coverage and values. By splitting the coverage, you can ensure that both the common property and your section are adequately protected and insured for the correct amounts. The body corporate can then correctly allocate these separately on the SRV (Schedule of Replacement Values). As you may well know, Addsure attends to your SRV as an additional service.
Coverage for theft
If you want your solar panels covered for theft, it is crucial to inform your insurance provider. Theft coverage is typically offered on an all-risk basis, providing comprehensive protection. However, it’s important to note that the coverage for theft of external panels may be limited. For instance, there might be a cap of R10,000 for the entire complex or multiple solar systems in the event of theft. To obtain theft coverage, you may need to pay an additional premium, typically anywhere between 1% and 5% of the panel’s value per annum.
We suggest that the conduct rules indicate as to whether or not solar panels are automatically covered, and whether or not theft cover is included.
Interior coverage
While the insurance policy usually covers the interior permanent (immoveable) components of the solar panel system, fixtures such as cabling, inverters, controllers, batteries, it is primarily concerned with the external aspects, which are more prone to risks of storm, theft, etc. Insurance providers often place greater emphasis on safeguarding the external components against theft or damage. However, in the sectional title environment, we also need to know whether components inside the home (section) will be of a permanent (immovable) nature and whether the body corporate must include such items on the policy.
Conclusion
In summary, insuring your solar panels in a sectional title complex requires careful consideration and accurate representation of the coverage in the insurance policy. By understanding the distinction between common property and your section, and differentiating coverage for normal perils and theft, you can ensure comprehensive protection for your solar panel investment. If you have further questions about structuring insurance policies or replacement value schedules, additional resources are available for more in-depth information.
- See our YouTube channel for more information on insuring solar installations
Author: Mike Addison, Addsure
Addsure is South Africa’s leading sectional title insurance brokerage. Obtain fit and proper advice from advisors who understand sectional title. Contact our head office, Cape Town (021) 551 5069 who will put you directly in touch with one of our nationwide advisors.