Code compliance and insurance claims

vtmaps
vtmaps Solar Expert Posts: 3,741 ✭✭✭✭
in General Solar Power Topics #1
I have read many posts on this forum about how if one uses non UL listed equipment, an insurance company may deny a claim on homeowner's insurance.

Does this also apply to UL listed, but non code compliant systems? I have seen many many descriptions and pictures of such non compliance on this forum. For example: Can an insurance company deny a liability claim if someone is electrocuted by a ground mount array without a fence? Can they deny a claim for some of the accidents that can happen when batteries are not installed in a battery box or for some of the accidents that can happen because of wiring that is not in conduit?

For the record, because of my inexperience (at the time) with code I hired a NABCEP installer to install my system, but since then I have learned a lot and corrected a few non compliant details.
--vtMaps
4 X 235watt Samsung, Midnite ePanel, Outback VFX3524 FM60 & mate, 4 Interstate L16, trimetric, Honda eu2000i
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  • BB.
    BB. Super Moderators, Administrators Posts: 33,658 admin
    #2
    Re: Code compliance and insurance claims

    In practice--it may be difficult for an insurance company to walk up to a claim site and start making of list of reasons they will not cover a claim. From an "engineering" point of view--there are rarely "accidents" but almost always somebody is at fault (or the claim would not have occurred in the first place). The courts seem to place a lot of the burden of proof on the "expert" in a contractual relationship...

    In the last decade or so, I have seen and talked with friends about insurance companies going out and documenting homes for basic information and even addressing potential hazards (last one was a few good sized trees that where dying and would fall over the next decade--and cause damage to property (and neighbor's) or even death depending if anyone was around when they fell (windstorm blowing into home, etc.).

    I am no attorney--but my guess is that for the insurance to deny coverage in all but the worst situations (i.e., illegal acts like electrifying solar mounts to stop a thief), they would have to inform the owner via an inspection of any issues prior to a claim.

    Again--purely a guess on my part.

    -Bill

    PS: I should add that no matter what happens with the claim, it does not stop an insurance company from going after people/companies that may have liability (say the electrician that incorrectly wired a home and caused a fire) and attempt to recover monies (I think that this is more true now in the last decade or so than for years past).
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #3
    Re: Code compliance and insurance claims

    I think when it gets right down to it, it is a negligence issue. Most policies have wording about doing negligent things that cause a claim. I would bet they could argue adding a solar system that is not permitted and up to code at the time could be considered negligent.
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  • SolaRevolution
    SolaRevolution Solar Expert Posts: 410 ✭✭
    #4
    Re: Code compliance and insurance claims

    I was talking to a client who is a freshly retired State Farm Insurance agent.

    She explained that in the case of a PV power system, insurance will cover damage caused by fire or explosion or injuries caused by electrocution or burns.

    If for instance, your power system died and damaged nothing but itself, this would not be covered. It would be a malfunction and would be the same as if your furnace went kaput. But if your system malfunctioned and started a fire that burned down the power room with panels on the roof, the insurance would pay for the replacement of your loss including the power equipment because it was destroyed by fire.

    In the case of an (uncovered) malfunction, the insurance would not have a vested interest in doing any investigation. In the case of a fire they would reimburse the policy holder and then may decide to look for someone at fault from whom to recover their loss. The greater their loss and the deeper the pockets of the responsible party, the greater their motivation will be to seek fault.

    If the installer makes a mistake or if the manufacturer's product is defective but causes no damage to anything else it is up to the customer to do what they can to recover any losses.

    The insurance industry can influence manufacturers and policy holders by giving preference or by charging more for covering property with or without certian features. They also lobby heavily for new rules and regulations. Fire sprinklers, CO and smoke detectors, arc fault and GFCIs, for instance.

    There may be an insurance company somewhere which would draw up a special policy if you were willing to pay for malfunction but it is not a "normal" item in homeowners policies.

    Alex
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  • niel
    niel Solar Expert Posts: 10,300 ✭✭✭✭
    #5
    Re: Code compliance and insurance claims

    they'll weasel out of it some how. it wouldn't surprise me if they deducted scrap metal prices on batteries and wires. it wouldn't surprise me it will be deemed your fault if you did the install even if inspected.
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  • waynefromnscanada
    waynefromnscanada Solar Expert Posts: 3,009 ✭✭✭✭
    #6
    Re: Code compliance and insurance claims

    I have insurance, but I fully expect that if anything goes wrong, I'll be left on my own as if I never had insurance in the first place. I view it as a yearly tax and nothing more, yet I keep paying - - - why?
    A neighbor of mine had his insurance co do an inspection, then hand him a list of things they demanded be changed. He showed them the door and now goes without insurance. If they told me they wouldn't cover me because of my solar system, I'd do the same. Life itself is a gamble.
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #7
    Re: Code compliance and insurance claims

    Really the issue is most can't afford to take that kind of financial hit. And of course if a mortgage is involved the escrow and mortgage company will,force the issue.
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