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Yes, you absolutely must inform your home insurance provider after installing a solar battery. A battery is a significant addition that increases your property's replacement value and can alter its risk profile. Failing to disclose it could lead to your insurer denying a claim for damage or fire, leaving you significantly out of pocket.
Do I tell my home insurance I added a battery?
Adding a battery to your solar power system is a major step towards energy independence and lowering your power bills. As you focus on the technical specifications and installation, it’s easy to overlook a crucial administrative step: notifying your home insurance provider. This isn’t just a suggestion; it’s a critical action to protect your investment and your home.
Why do I need to tell my insurer?
Think of adding a battery like building a new extension or a swimming pool. It’s a significant structural modification that adds substantial value to your property. Your home insurance policy is based on the “sum insured” – the total cost to rebuild your home from scratch. By adding a battery, which can cost thousands of dollars, you’ve increased the rebuild cost.
If you don’t update your policy, you risk being underinsured. In the unfortunate event of a total loss, like a house fire, your existing policy would not cover the cost of the new battery, forcing you to pay for its replacement out of pocket.
More importantly, failing to inform your insurer about a new battery installation could give them grounds to deny a claim, even if the claim is unrelated to the battery itself. Insurance policies are based on a principle of full disclosure; by not telling them about a material change, you could be seen as violating the terms of your policy.
How does a battery affect my insurance policy?
When you notify your insurer, a few things will happen.
- Your battery system will typically be covered under your building insurance, not your contents insurance. This is because it’s considered a permanent fixture, just like your solar panels, inverter, or a built-in air conditioning system. Some insurers, like Budget Direct, have clear definitions for energy storage systems as part of their building cover.
- Your annual premium will likely increase. This shouldn’t be a cause for alarm. The increase isn’t because batteries are considered exceptionally high-risk, but rather because your total sum insured has gone up to reflect the added value of the system. The small increase in your premium is a worthwhile cost for the peace of mind that your entire system is protected.
- Your insurer will update your policy documents to formally include the new system. This ensures there is no ambiguity if you need to make a claim in the future.
What information will my insurer need?
When you call your provider, be prepared to give them some key details. They will want to know the total value of the system, including the battery, inverter, and installation costs. It’s wise to keep all documentation from your installer handy, including invoices, compliance certificates, and warranty information, as these may be needed to validate a future claim.
Your insurer will also be reassured to know that your system was installed by a Solar Accreditation Australia (SAA) or Clean Energy Council (CEC) accredited professional. While they may not always ask for proof upfront, using a certified installer is crucial. If a fire or damage is caused by a non-compliant or faulty installation, your insurer has the right to deny the claim.
Are there specific safety and installation standards to be aware of?
Yes, and they are critical for both your safety and your insurance coverage. In Australia, battery installations must comply with strict standards, particularly AS/NZS 5139. This standard covers everything from the battery’s location and ventilation to fire safety measures.
For example, a battery should be installed in a well-ventilated area, away from direct sunlight and combustible materials, and be inaccessible to children. Systems from reputable manufacturers like Sungrow or Sigenergy are designed with advanced battery management systems (BMS) that monitor temperature and voltage to prevent overheating, a key safety feature your insurer will appreciate. Adhering to these standards, verified by a qualified installer, is non-negotiable and provides a crucial layer of protection.
What happens if I don’t tell my insurer?
The consequences can be severe. If your battery system were to be damaged in a storm or, in a rare worst-case scenario, be the cause of a fire, your insurer could refuse the claim entirely because the system was not disclosed on your policy. This would leave you responsible not only for the cost of replacing the battery but also for repairing any subsequent damage to your home.
Underinsurance is a significant issue for many Australian homeowners. By consciously updating your policy to include your new battery, you ensure that you are fully covered for the true replacement value of your home and its valuable systems.
Your next steps
Once your battery installation is complete, your first call should be to your insurance provider. The process is usually straightforward and simply involves updating your sum insured to reflect the new value of your home.
Ask them to provide written confirmation that your policy has been updated and that the battery system is explicitly covered. This simple administrative task is a vital final step in your solar battery journey, providing the financial security needed to enjoy your new level of energy independence with complete confidence.
