Jan 13, 2022
Important factors for home electrical systems and insurance
Electrical wiring is one of the many considerations when comparing houses, especially if you consider buying an older home in Ontario.
But what if you find knob and tube or 60-AMP? These old ways are electrical may not be safe and can cause issues for insurers. Electrical codes and standards have advanced a lot over the years. If your home isn’t structurally protected, insurers may have issues approving you.
Learn about the different types of electrical wiring in homes and how they may impact your home insurance costs.
Types of electrical systems in homes
Homes built before the 1980s create policy issues because of the electrical wiring. When you are house hunting, your home inspection will confirm which type of wiring. Unless your home or business is newly constructed, you may come across some of these wiring hazards :
- Knob and tube : Considered the most dangerous form of wiring. Because it’s single-insulated, it can quickly become hazardous due to fraying.
- Aluminum : Commonly found in homes built in the 1960s and 1970s. It’s dangerous because it has a higher rate of thermal expansion. When the electricity passes through cables and connectors, wires heat up and expand. It is very rarely used in buildings today.
- Low AMP : Technology is constantly changing – we have more appliances, and they often need stronger amperage. Older wiring is usually rated for a lower AMP than today’s devices need. This can cause circuits to overload and lead to a fire.
- Copper : This is the standard for electrical wiring used in home construction today. It lasts up to 100 years and is less risky than aluminum.
Does insurance cover electrical panel replacement?
You will only have coverage of replacing an electrical panel (breaker box) if it is damaged by a specific peril included in your policy.
If your electrical panel is damaged from fire or flood, it will be replaced. However, they will not include most old electrical panels or ones neglected from maintenance. If there is an old electrical panel malfunction and causes damages, the replacement will not be covered or anything else damaged in the process.
How much does it cost to replace the electrical panel in Canada?
If you notice that breakers keep blowing, you have an old fuse box, lights flicker, and dim, or the panel is outdated, it is likely time to upgrade. Shop around and get at least three estimates before you commit and ensure you have a certified electrician who specializes in panel and service upgrades. Depending on the upgrades, you can expect to spend between $500 and $2,000 to replace your electrical panel in Canada.
Is aluminum wire safe for homes?
While knob and tube tend to get the most attention when discussing home wiring issues, aluminum wiring comes in a close second. The material is more affordable, malleable and used in various industries. Aluminum wiring became popular during the 1960s and 1970s because of the high price of copper – in fact, 55% of homes built then are more likely to have it.
However, many fires and deaths resulting from aluminum wiring caused builders to abandon it. It was not because of the actual wire, but it became a fire hazard if not installed correctly. The contact points can become corroded by oxygen or rust. "The wire itself was not the issue. The connection points at switches, outlets, fixtures, lights and receptacles were cause for concern. Over time, these connections failed, causing them to loosen, increasing the likelihood of electrical fires," says Sean Moss on REW News.
How to check your home for aluminum wiring
If you are looking for a new home, or want to see your current property for the type of wiring used, here’s how you can check :
- Look for exposed wiring : The basement, the attic may have exposed wires. You can also check the electrical panel.
- Check the outer casting : If the wiring is aluminum, it will be marked with ALUMINUM, ALUM, AL. ALUMINUM, ACM, ALUM ACM, or ALACM.
- Get it inspected : If you can determine the wiring is aluminum, it’s time to get it inspected to ensure it is correctly installed.
Aluminum wiring and insurance
Since aluminum wiring has been phased out due to safety concerns and is viewed as unsafe by insurers, you may have issues getting approved for protection. Like homes with knob and tube, some companies provide it, and others don’t.
Many insurers will require a complete inspection by a certified electrician before offering coverage. Depending on the wiring state, an upgrade to copper may be needed to get approved. You may also be able to get it through specialty home insurance.
Do you need to convert 60-AMP service to 100-AMP service for insurance?
AMP electrical service is another electrical issue that could create problems. 60-AMP is found in homes built before 1950 - it is not designed to handle the electrical requirements of modern homes. Homes with 60-AMP service are at risk of overuse, overheating, and increased fire risk. This can happen if it draws more than 60-AMPs – it will cause the fuses to blow or the breaker to trip. Homes with 60-AMP service are at risk of overuse, overheating, and increased fire risk. This can happen if it draws more than 60-AMPs – it will cause the fuses to blow or the breaker to trip.
Today, the current standard for new homes is 100 AMPs, and some insurers may request you upgrade to 100-AMP service to get coverage. FSCO explains that you can upgrade or install a switching device that allows for the operation of one major appliance at a time.
Is rewiring a house covered by insurance?
Insurers will generally not cover the costs to upgrade electrical. However, if there is a home insurance claim, you may be substituted for any damages depending on your policy.
Suppose you plan to purchase an older home with dated wiring - in that case, you may have issues getting coverage. You may be required to update your wiring or have an inspector approve it before you can get coverage. Only certified technicians can do electrical work in your home – you can visit the ESA to find a local technician.
They will not pay to replace outdated wiring or the cost to renovate your home’s electrical system. It will cover damage caused to your home if wiring arcs or causes a fire. It’s covered if the damage is caused by a peril included.
Since all companies are different, it’s good to clarify what is and is not protected with your plan.
Home electrical system FAQS
If you need to begin renovations to upgrade writing, depending on how large your home is and how much needs to be replaced, costs can start around $2,000 and upwards to $20,000 for a larger house.
Copper wiring is more durable, and the connection points are less prone to breaking, fraying, corrosion, and oxidation. Aluminum is prone to breaking, fraying, corrosion, and oxidation. Although they can both be used in homes, make sure they are not installed together.
You can, but consider getting it checked out by a professional after installing a new electrical panel. DIY electrical work is dangerous, and you may violate local codes during the process, which can lead to issues.
Faulty wiring can be a threat to your home. If you ignore any warning signs or signals of potential issues, you need to get it checked out. If you don’t act on this, your claim could be denied, and if you DIY the solution, it could also cause problems with your coverage.
Compare your options for wiring and insurance
Whether you are looking to purchase a new home or it’s time to renew your current policy, we will work to find you the protection you need. We'll go over any extra coverage you may need, such as homesharing insurance or contents insurance.