Installing a home generator is a smart way to protect your property and stay powered during blackouts. But beyond comfort and convenience, many homeowners want to know: How does a generator affect my homeowners insurance or home value?
The good news? A generator can positively impact both. While it won’t drastically reduce your premiums, it may make you eligible for certain insurance discounts and can significantly increase your home’s resale value—especially in areas prone to outages.
In this guide, we’ll break down how different types of generators influence your insurance coverage, potential savings, home appraisal value, and what you need to know before installation.
Can a Generator Lower My Homeowners Insurance Premium?
Yes, in some cases—but don’t expect major savings. Installing a standby generator may qualify you for a modest discount from your insurance provider, depending on your location and the type of system installed.
Why Insurers May Offer Discounts:
- Loss prevention: Backup power helps prevent frozen pipes, sump pump failure, mold growth, and other risks during an outage.
- Security protection: A generator keeps security systems online when the power is out.
- Reduced claims: Homes with reliable backup power are less likely to file damage claims after storms.
Typical Discount Amount:
- Average discount: 3% – 7% off annual premium
- Higher discounts: Possible in disaster-prone regions (e.g., Florida, California, Texas)
Contact your insurance provider to ask if they offer a discount for standby or whole-home generators. Be sure to provide:
- Installation documentation
- Proof of permits and code compliance
- Model and fuel type
What Type of Generator Impacts Insurance the Most?
Only standby (permanently installed) generators are likely to affect your insurance policy. Portable generators, while helpful in emergencies, typically don’t qualify for discounts or added protection because they are not integrated into the home’s electrical system.
| Generator Type | Insurance Impact | Qualifies for Discount? |
|---|---|---|
| Portable Generator | No impact on policy or premium | ❌ No |
| Inverter Generator | Same as portable | ❌ No |
| Standby Generator (Whole-House) | Positive impact with documentation | ✅ Yes (in some cases) |
Insurance carriers view permanently installed generators as part of your home’s built-in safety infrastructure—like security systems or storm shutters.
Will Installing a Generator Affect My Insurance Coverage?
It can—both positively and negatively—depending on how the generator is installed and disclosed.
✅ When Installed Properly:
- You may be eligible for a small discount
- Your policy may better cover losses during extended outages
- Reduced risk of claims from power-related damage
⚠️ When Installed Improperly:
- May void coverage if not up to code
- Claims could be denied for damage caused by faulty wiring or fuel connections
- DIY installations without permits may be disqualified
Tip: Always use a licensed electrician and ensure all local code and permitting requirements are met. Notify your insurance company after installation so they can update your policy if needed.
Does a Generator Increase Home Value?
Yes—especially whole-house standby generators. A properly installed standby generator can increase your home’s resale value by 3% to 5% or more, depending on your market and the size of the system.
Why Buyers Value Backup Power:
- Protects against weather-related outages
- Keeps heating, cooling, and refrigeration online
- Supports remote work, online learning, and medical equipment
- Offers peace of mind during natural disasters
In competitive markets, having a whole-home generator can set your listing apart and help you sell faster—particularly in regions with frequent blackouts or extreme weather.
Estimated Value Increase:
- Mid-range generator system: May add $5,000 – $10,000 in value
- Premium, whole-home setup: Can boost value by $10,000 – $15,000+
According to Remodeling Magazine, a generator installation has a 60%–70% ROI (return on investment) on average—higher in high-risk or off-grid areas.
Is Generator Coverage Included in My Homeowners Policy?
Most homeowners insurance policies do cover damage to generators under the “other structures” or personal property section—but only if caused by a covered peril such as fire, theft, wind, or falling objects.
What’s Typically Covered:
- Storm or lightning damage
- Falling trees or debris
- Theft or vandalism
- Fire or smoke damage
What’s Typically Not Covered:
- Wear and tear or maintenance issues
- Fuel-related damage or leaks
- Flooding (requires separate flood insurance)
- Damage from improper installation
Tip: If your generator is permanently installed and hardwired, ask your insurer to list it as a covered structure or fixture on your policy. You may need to provide receipts or installation documents.
Should I Add Extra Coverage for My Generator?
It’s a good idea—especially for whole-house units that cost $10,000 or more to replace. Ask your insurer about a rider or endorsement to increase your coverage limit on external fixtures or appliances.
Some homeowners also choose to add equipment breakdown coverage (if available), which may help cover repairs or replacement if your generator fails due to a mechanical issue or power surge.
Safety, Code, and Compliance Considerations
To positively affect your insurance or home value, your generator must be professionally installed, permitted, and code compliant. This includes:
- Correct placement (at least 5 feet from doors and windows)
- Wiring by a licensed electrician
- Gas or propane connections installed by a certified plumber
- Permits pulled and final inspection passed
Failure to follow local codes can result in denied claims or insurance cancellation. Always keep records of your installation and inspections for documentation.
FAQs About Generators and Insurance or Home Value
Q: Does homeowners insurance cover the cost of buying a generator?
No. Generators are considered upgrades or personal property and are not covered unless damaged by a named peril in your policy.
Q: Will installing a generator raise my property taxes?
It might. Some counties view standby generators as a “capital improvement” and may increase your home’s assessed value. Check with your local tax authority.
Q: What happens if my generator causes a fire or injury?
If the generator was installed properly and covered under your policy, your liability and dwelling coverage should apply. Improper DIY installations may not be covered.
Q: Can I get a discount for a portable generator?
Usually not. Insurance discounts typically apply only to permanent standby generators that are hardwired and professionally installed.
Q: Do I need to notify my insurer if I install a generator?
Yes. You should notify your insurer after installing a generator, especially if it’s a permanent unit, so they can update your policy and advise you on any coverage or discounts available.
Conclusion: A Generator Is a Smart Investment for Protection—and Property Value
Installing a whole-house generator not only protects your home during outages—it can also add value to your property and potentially reduce your homeowners insurance premium. Standby systems are increasingly seen as essential safety features, especially in storm-prone or remote areas.
To maximize benefits, be sure to:
- Have your generator professionally installed
- Pull all required permits and inspections
- Notify your insurance provider
- Explore coverage enhancements for added protection
By doing so, you can enjoy year-round peace of mind—while also improving your home’s market appeal and resilience against the unexpected.
Need Help Choosing the Right Generator for Your Home?
Start with our in-depth guide: What Size Generator Do I Need for My Home? to find the perfect solution based on your home’s needs, location, and budget.