Guide to off-grid home insurance

The choice to live off the grid is made for any number of reasons, including concerns about climate change. Off-grid homes have some differences, but they still need insurance.

Off-grid home insurance is a necessity to protect you and your family, but not all policies are created the same, and some types of fuel in your home may make insurance harder to find or more expensive.

Below, we’ll discuss how to insure an off-grid home and what you can expect from the coverage

What is off-grid home insurance?

When you go off the grid, it means you live in a home independent from municipal power or water. Instead of reliance on traditional utilities, homeowners utilize alternative sources for fuel. 

Climate change has forced many to reexamine the way we live our lives, and for those who want to lower their carbon footprint, going off the grid can be the perfect solution. 

When you live off the grid, it is still important to protect your property with home insurance. Just like a traditional property, you want to ensure that your property is protected in case of damage. 

What does off grid home insurance cover?

Living off the grid can mean different things to different people. Some people may live completely independent of public utilities like water and electricity, while others may opt for public water service but employ solar panels for electricity. Even in this case, home insurance for off-grid solar homes is often the same as normal home insurance, covering the usual covered perils like fire, wind, water damage and theft. 

How does off grid home insurance work?

Off-grid home insurance is like regular home insurance in that it covers your home’s physical structure and any attached structures, such as a garage or shed, as well as your personal belongings inside. Your insurance policy’s declaration page will identify any exclusions in your policy that may require additional coverage.

Your insurance company will work with you to identify the risks within your home and recommend the right coverage to fully protect your family. 

Do off grid homes require special insurance?

No. Off-grid homes don’t require special insurance. There is not an independent off-grid home insurance policy. Instead, most homeowners can utilize a traditional home insurance policy.

Home insurance coverage may differ slightly based on your usage. While some live off the grid permanently, others may purchase a second property as a seasonal retreat. In this case, you may only require add-on coverage to your existing property. 

Is the cost of off-grid home insurance high?

Because off grid home insurance is largely the same as home insurance, you will not likely pay more for off-grid home insurance than the average cost of home insurance. Insurers price policies based on your specific home and set-up, taking into consideration additional threats, such as the use of a wood stove or increased risk of theft with seasonal properties.

Off-grid home insurance may be more expensive than standard home insurance in specific cases.

• Use of firewood and coal: When there is heavy use of these two sources, there is an increased risk of fire in the home, so it may cost more to cover this risk.   
• DIY installation: Many insurers will not insure homes if you installed the electricity without a licensed electrician.
• Water access: Regular access to some sort of water is often required for home insurance coverage.  
• Location: If your home is located in an area prone to extreme weather events like floods or wildfires, you may either pay more or be refused for home insurance. Remote locations may also be more costly as they are far from emergency services.

Depending on your specific circumstances, you may require an additional endorsement to provide specific coverage. 

How to buy an off-grid home insurance policy

Many of the best home insurance companies offer off-grid insurance. For years, State Farm has underwritten policies for homes that are not hooked up to a power company. Jeff McCollum, a company spokesperson, says the insurer treats these homes like any other property: The risk and insurance premium for each is evaluated on an individual basis.

“We have no problem insuring homes that are off the grid,” McCollum says. “We’ve been around more than 80 years, so we were insuring homes that were off the grid before there was a grid.”

However, you may have trouble finding an insurer if your home is not built to professional code or there is no close proximity to emergency services. 

“If someone is living in a house with no heat and no water, that’s not somebody we would like to insure,” says Cyril Greenya, former Chief Underwriting Officer of Donegal Insurance Group. “If they have wood fireplaces or coal stoves, that’s not something we want to insure. Now you’re talking about a fire hazard. But geothermal and solar are different. They’re safe.” 

Our home insurance quote comparison tool can help you find the best home insurance company with the cheapest coverage for you. 

Home insurance for off-grid solar homes

Most rooftop solar panels are covered by standard homeowners insurance policies, but you might need to increase the amount of coverage to account for the cost of the system. Other kinds of solar, like solar panel carports or ground-mounted panels, may require an add-on or a new policy. Comparing policies can help ensure you have all of the coverage you need.

You do not have to buy additional riders for policies to cover either solar panels or geothermal pumps. The equipment value is included in your home’s total replacement cost, but you should make certain that your policy accurately reflects the current replacement cost to rebuild or repair your home.

Thankfully, many home insurance companies offer special discounts to help lower the cost of your home insurance policy. 

Home insurance discounts for going green

Over the last several years, many home insurance companies have offered their customers home insurance discounts for owning environmentally friendly homes. 

Michael Barry is Senior Vice President and the Head of Media Relations and Public Affairs for the Insurance Information Institute (III). He says that as alternative energy becomes more popular, more insurers might start offering “off the grid” discounts in order to gain a competitive edge. “As homeowners migrate toward green buildings, home insurers are going to go with them,” he says. However, Barry notes that he is not aware of any insurers besides Donegal to offer homeowners a specific discount for being off the grid. 

Still, there are many other discounts that you can leverage to save money on your off-grid home insurance.

• Green discounts: While insurers do not discount off-grid insurance specifically, you could receive green home discounts when you use eco-friendly materials or resources within your home.
• Smoke detector discount: Most insurers will pass along savings when you lower your risk of a claim by installing a smoke detector or other fire safety device in your home.
• Security discount: Installing a home security system could earn you extra savings.  
• Bundle discount: You can save when you bundle your seasonal off-grid home insurance with your regular home insurance policy. 
• Multi-policy discount: Many companies also offer an additional discount when you bundle your home and auto insurance policies. 

Before you purchase your policy, ask your insurance agent what discounts may apply to your specific policy to lower your total premium.

The bottom line

Off-grid home insurance is not too much different from standard home insurance, although you may require additional coverage or endorsements to ensure full protection. However, you may pay more for your policy, and it may not be so easy to find the right insurance company that will insure an off-grid home. 

“Alternative energy coverage is a niche business,” Barry says, “but as more homes are being built that are so-called eco-friendly, and as more homeowners take an interest in them and as more builders build them, you will see more insurers cater to this audience.”

Just be patient, because off-grid home insurance may not be so easy to find from every home insurance provider.

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