Home insurance policies will be transformed with almost every home, apartment block and small business on track to have solar panels and batteries by 2050, according to Finity.

“Homes will be power stations, generating and storing their own electricity. The home energy revolution is here,” the actuarial group says.

Risks associated with home energy systems include economic loss from having to source alternative energy after damage, and challenges accessing expert repairers.

Insurers need to develop supply chains for panels, inverters, home batteries, chargers and smart meters, and will have to consider how cash settlements will be determined. There may also be third party risks.

A product disclosure statement in 2035 will have to include the home energy system, perhaps providing a clear definition of maintenance required, Finity says.

Accidental damage might be available as optional cover, with further benefits such as temporary accommodation if a home is uninhabitable due to energy system outages.

“Some things may need to change. Should a home energy system be clearly defined and covered by the home building policy? Should the sum insured include a specific sum for total replacement of the home energy system?  

“On policy inception/renewal, should homeowners be required to disclose relevant details about their home energy system?”

After damage, retail grid back-up may become vastly more expensive because the costs are not shared between many customers. Finity says an electric insurance policy could “provide a hedge” against the retail market.

And insurers replacing damaged gas water heaters or vehicles with electric versions would represent a “meaningful use of insurers’ sphere of influence over household decisions to incentivise uptake of zero-emissions technologies”.  

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