The electric panel controls the electricity of the entire home and it is the origin of all electric power. The electric panel is referred to as the “breaker box” and it has a myriad of controls that allow electricians to manipulate the different ways electricity enters the home. The electric panel is directly responsible for powering home appliances (fridges, washers, stoves, etc.), light systems, water systems, air conditioning, and furnace. The electric box is useful when you want to shut off electricity in a certain part of the home and this is why it must be covered by home insurance. The main problem with electric panels is that the old ones haven’t undergone maintenance and are prone to breaking down.
Does homeowners insurance cover electrical panel? Yes, electrical panels are covered under home insurance as long as they were damaged by named perils. These perils include storms, fires, floods, and others. If the panel was damaged as a result of lack of maintenance or age, it will not be covered by home insurance. Homeowners insurance will only cover you for damage if it was unforeseen. The insurance company assumes you’re carrying out regular maintenance. If your panel is over 30 years old, consult an electrician to upgrade it to the latest safety standards. As long as it’s up to the latest electric code, you’re guaranteed coverage.
Some home insurance policies exclude certain fire sources, including those caused by faulty wiring. Bad wiring is a home’s most pernicious fire risk, especially if it derives from a faulty electrical panel. If you’re wondering whether or not homeowners insurance will cover the electrical panel, start by inspecting the panel itself.
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Electric Panels Are Fire Hazards
The electrical panel is not only dangerous to the touch if it’s outdated and you try fixing it yourself. It’s also dangerous on its own because it could explode due to power pressure. The appliances of the modern era require a lot more power than old appliances which puts additional strain on an electrical panel.
- If your panel hasn’t been updated in over 30 years and you put pressure on it with the latest appliances, it could lead to over-currents and explosions that cause house fires. This is an immediate threat to your entire family. All outdated electrical panels are a fire hazard and have to be addressed immediately.
The electrical panel is the heart of your entire electric system in the home and it’s responsible for readjusting the amount of electricity that individual fixtures or parts of the home can use. The panel is also supposed to safeguard the use of electricity by evening out the electric load and making sure the wiring is not overburdened, so you don’t get random fires at different areas of the house. This is why if you have a close look at the panel, each breaker is ranked with a certain AMP number. The unfortunate case is that circuits can overload on that breaker and inappropriate wiring can cause it to malfunction. Outdated electrical panels are a risk because A) they pose fire hazards B) they can damage new appliances in the home if they glitch and cause a power surge.
We recommend replacing an electrical panel with a new panel. This can be costly but it’s worth it. The only downside here is that it’s quite a task to replace an electrical panel and you must find the right licensed electrician. These panels can NOT be replaced as a “DIY” project at home, and they have to be removed and installed by qualified and experienced electricians. While this part may seem terrifying, you can actually get the insurance company to step in and help you cover the cost of replacing the panel.
Pro Tip: Ask your insurance agent if they’re willing to help you replace the panel. They’ll most likely be open to the suggestion, seeing as it will help reduce the risk of your house catching on fire.
How To Make Sure You’re Covered
The insurance company will reject your claim if your electrical panel is old and you haven’t replaced it. In rare cases, homeowners insurance will help you cover the damage associated with a faulty electrical panel. The coverage boils down to the type of panel you have, the age, and other factors. Hire an electrician to carry out an investigation and tell you if your current panel meets electric code standards in your area. There are certain specifications that all panels must abide by for safety purposes. Technically speaking, the insurance company must help you if the panel abides by current electric standards in your area.
We highly recommend replacing old electric panels with new ones because the new generation is vastly improved. New electric panels are not only safer for the home, but they are far more productive and can handle higher voltages. You can assume that any electric panel built within the last 20 years is going to abide by your local electric codes. Electric codes are designed to help minimize the risks of electrical accidents.
Insurance companies have varying approaches to electric panels. Some will outright deny you coverage if you don’t have a new-generation panel. Others will help you cover the cost of replacing your outdated electric panel. The key here is to not only look for a company that will support your outdated panel but find one that will support you in your endeavor to replace it. This way you can enjoy higher coverage and not put your family at risk. Here are some tips to stay on the safe side:
- Call up a licensed electrician for an investigation. Make sure to have your electric panels checked at least once every 12 months. This way if you have minor issues as a result of storms or termites, you can get them fixed.
- Shut off power to areas of the home that have electric issues. If you have these issues, there could be something wrong with the wiring. Preventing electric flow in that area will help you avoid a fire.
- Minimize appliance use. If you’re still using your old electric panel, make sure you’re not using too many electric appliances at once. Wait until you upgrade your panel before you connect every device at once.
- Consult your insurance company to find out if they can lower your premiums for replacing your panel and/or help you with the purchase of a new electrical panel.
Signs You Need An Electric Panel Replacement
There are certain signs that indicate your electrical panel is ripe for a replacement. If you haven’t opened your panel in over 5 years, you might be surprised at what’s hiding out there and your panel will likely need a replacement. The same applies to many homes that went uninhabited. However, assuming you’ve carried out regular maintenance, these are indicators you need a replacement:
- Circuit breakers that trip too often. As your panel starts wearing down, you’ll notice it becomes a lot more susceptible to random power surges. This is shown in individual circuit breakers. Breakers also don’t reset automatically.
- Electrical fires. You might notice certain signs of a fire such as a smoke smell or fire residue in some parts of your panel. Many times these fires are contained there but this is a definite indicator you need a replacement.
- Lights dimming or flickering. If your lights start dimming and flickering, this is an indicator you have an electrical problem more than a fixture problem. The main indicator this is an electric issue is if lights start dimming the minute you connect another appliance.
With that being said, you might be surprised at how affordable it is to replace an electrical panel. The average upgrade costs between $1,000-3,000 with labor costs included. This is a worthy price to bring your home up to standard and avoid house fires that could cost you hundreds of thousands in repairs and/or hurt your loved ones.
The average 100 AMP electric panel could cost as little as $800 while the most expensive 400 AMP panel would cost $4,000. If you were to purchase a 200 AMP panel for $1,500 and the electrician charged you $500 for a professional installation, you’d pay a grand total of $2,000. Low-amp sub-panels can cost less than $500. Replacing your panel is an affordable and worth endeavor to secure your family.
What Is An Electrical Panel?
Essentially, the electrical panel is the origin of electricity for your entire home. It is also known as a breaker box. Panels come wrought with a myriad of controls that help you to manipulate the major power systems in your home. Commonly you will find control switches that transmit power to appliances, water systems, HVAC systems, and even the furnace. If there is ever a time where you need to shut off electricity to parts of the home, you can do so with the box.
The electrical panel is responsible for readjusting the amount of electricity that can be used on a given property at one time. One major duty of the panel is to safeguard the wiring to the home from being overburdened and starting a fire. This is why each respective breaker is ranked for a given amount of amperage. Unfortunately, the circuits on a breaker can overload, or erroneous wiring can cause the breaker to glitch. Outdated or damaged panels are serious fire hazards. They can also damage major appliances and other areas of the home. Replacing old or damaged panels is key, but that can be costly. This is where insurance can help.
Is My Electrical Panel Protected?
This is a question with a few discordant answers. Your homeowners insurance may or may not cover risks associated with an electrical panel. Coverage typically depends on the type of panel you use, its age, and other stipulations. The panel will also have to meet certain electrical code specifications. Generally speaking, a complete homeowners policy will cover the electrical panel should it malfunction or prove a substantial risk.
Replacing old panel boxes is ideal because of improvements in new panels. Not only are they more productive, but contemporary wiring practices also make your home far safer. Local laws regarding panel box wiring can vary wildly based on your region or town. Codes are intended to help keep the risks associated with electrical wiring low.
If you live in an older home with an outdated box, it can pose a serious fire risk. However, not every insurance provider will help you with the expense of a new panel box. In fact, a few may require you to install a new panel box before they will even extend your coverage. This coverage isn’t just contingent on the panel box itself, but on whether or not your box meets code requirements in your region. To err on the side of caution, do these things:
- Have an inspector check electrical wiring to your panel box annually (this can help with claims should you need to contact insurance).
- If you’re having electrical issues, shut the power off to the affected area of the home as soon as possible.
- Don’t run too many appliances or systems at one time, as this can result in a blown fuse. This is typically not covered by your homeowners insurance.
Your insurance company will cover some types of panel boxes in certain circumstances but may deny you coverage if your panel boxes are outdated or proven to be significantly risky.
What Types of Electrical Panels Will Insurance Not Cover?
There is one specific type of electrical panel that an insurance company will not cover. With that said, they may also deny you full home coverage until the panel is replaced. If your home was built between 1950 and 1990, you may have a Federal Pacific Electric Company circuit breaker panel installed.
They were one of the leading manufacturers of panels during this time period. Unfortunately, FPE panels are a well-known fire hazard. Even if the panels work properly for years, they can prove perilous. Laboratory tests found that these panels fail to trip when circuits are overloaded, often resulting in a major fire. Because of the well-known risk associated with these panels, many insurance companies will not cover them.