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Does Homeowners Insurance Cover Electrical Problems?

Does Homeowners Insurance Cover Electrical Problems?

Does Homeowners Insurance Cover Electrical Problems?

Electrical systems in the home are an out-of-sight, out-of-mind concern for most of us. We assume that as long as there are no dimming lights or buzzing sounds coming from the sockets and LED fixtures, we’re not in danger. This is not the case. There are hundreds of potential electrical faults that can occur in every part of your home lined with electric wiring and this can be more dangerous than you realize. If something goes wrong with electrical wiring in the home, you want to know you’re protected. This guide will take a detailed look at the way home insurance treats electrical wiring and malfunctioning in the home.

Does homeowners insurance cover electrical problems? Yes, electrical problems in the home are covered by homeowners insurance. The only exception is for homes that use old wiring types such as knob-and-tube and aluminum. Many homes built before the 1960s still use outdated electrical wiring and they are more likely to malfunction. Homeowners insurance will outright deny claims for electrical problems or make the owners purchase a special rider/endorsement for knob-and-tube and aluminum wiring. Optimally, you should upgrade your electrical wiring to meet today’s safety standards.

Top Signs Of Electrical Malfunctioning

There are many signs that indicate you’re overdue for upgrades to your electric system. These can lead to serious electrical breakdowns and even house fires. Make sure to call in an electrician if you notice any of the following:

  • Dimming/buzzing lights. The lights may suddenly dim or start flickering or buzzing at a certain point. If your lights start dimming when you activate another appliance in the home like the stove or a microwave, this means that your wiring system is less than optimal. Inefficient wiring of this kind can easily be categorized as a fire hazard.
  • Broken outlets. If the outlets on your home are not working or if they have trouble running items, those outlets are likely worn out and they need replacements. Sometimes you won’t notice this until you manipulate the cord and the appliance goes out. Here’s the problem: When you have multiple outlets affected by this, you’re likely dealing with a bad connection along the electrical circuit and you have to address this.
  • Excess light wattage. You must have the right wattage on your light bulbs regardless of whether you use new LED systems or incandescent bulbs. Check the wattage on your bulb to make sure you didn’t get a hotter one. If you replaced your old bulb with a hotter bulb to get more light in the room, this could easily harm the fixture. Try to feel out the dimmer switch to see if it feels hot. This is a sign of a heat buildup in the wattage lamps. If you have a smart system that automatically shuts itself off and activates later on, this is a sign that you’re using higher wattage than you should be.
  • Bare wiring. Make sure there aren’t any bare wires on any of your appliances. This is a bad indicator about the state of your electrical wiring because it can lead to electric shocks and should be covered up instantly. Make sure to shut the appliance off and consult an electrician to replace the whole wire before you use the appliance again.
  • Outdated wiring. Schedule an electrical inspection to find out what type of wiring your home uses. The wiring is usually not replaced in decades and if you live in a historic home, you likely have wiring dating back to the 50s and earlier. This wiring lacks modern safety features and could put your family in danger. Most modern wiring systems have GFCI circuit interpreters and three-prong receptacles to control the flow of electricity. Aluminum wiring was sometimes used to cut costs. If you just bought a home, you may have to re-install some outlets if the previous owner did this themselves instead of hiring an electrician.

Why Knob-And-Tube And Aluminum Wiring Is Different

Insurance companies treat homes with knob/tubing and aluminum wiring differently because they pose a higher risk to the insurance company. These wiring systems can lead to electric breakdowns that cause electric fires and other dangers. Many home insurance providers outright reject homeowners with wiring of this kind or they pay a higher premium for minimal coverage. This is why you should replace the wiring or upgrade it to the latest safety standards to enjoy coverage and lower premiums.

Knob-And-Tube Electric Wiring

Knob and tube electric wiring was the staple of electric wiring when electricity was first introduced in most homes between the late 1800s and the early 40s. Most homes built before the 1960s use this system. It is an electric system built from ceramic knobs and porcelain tubing combined with rubber for isolation. The main reason this wiring is unsafe is because the systems lack a grounding conductor. 

This can cause significant damage to appliances in the kitchen and the bathroom that are at risk of coming in contact with water. The long-term exposure to the elements also leaves this wiring vulnerable to exposure. Keep in mind if you’re not a generational owner of a home, previous homeowners might have made modifications to accommodate newer electric appliances. You’ll have to hire an experienced electrician to inspect your entire home.

Aluminum Electric Wiring

Aluminum wiring was the most used material for new-builds between the 60s and 70s when the construction industry preferred aluminum to copper. Copper was deemed the more expensive solution and millions of homes were built using aluminum wiring. If your home was built anywhere between 1960-1070 it likely uses aluminum wiring. 

According to the Public Safety Commission, aluminum wiring is a 60x higher fire risk than copper wiring. Copper is much more fire-resistant and susceptible to damage than aluminum which is why it’s the staple to this date. Aluminum wiring tends to overheat and break down faster. We recommend replacing your aluminum wiring with copper to decrease the fire risk in your home.

Coverage For Electrical Problems With Insurance

Homeowners insurance will cover most problems related to electrical wiring such as appliance breakdowns, power surges, socket malfunctioning, etc. The main issue is whether they’ll deny coverage based on the wiring in your home.

The coverage entirely depends on the age of your home and the type of wiring you have. Under certain conditions, knob and tube and aluminum wiring can be covered as long as you purchase a separate rider and pay higher premiums. It could actually be cheaper to replace the wiring with copper wiring in the long-term because you’ll enjoy higher coverage and safety in the home.

When You Need An Electric Inspection

You need a home inspection to determine if the electrical system in your home is safe or you should replace it. Don’t wait until appliances start breaking down or smoke penetrates through your walls until you schedule an inspection. The following signs indicate that your home needs an inspection:

  • Your home was built before 1975
  • You added new home appliances that use a lot of electric energy and can put a strain on your wiring
  • You use two-prong outlets in your home
  • Your home has aluminum wiring
  • You use extension cords to get power

In most cases, the insurance company won’t pay for electrical problems that are related to bad work on the electrician service end. Most policies won’t cover electric damage caused by faulty wiring systems. This is why the only way to make sure you’re covered is to hire a licensed electrician to take a good look at the wiring in your home and replace the wiring immediately.

Other Signs

Having your home covered for electrical issues by your homeowners policy is generally not a problem. The issue is normally how much you will pay. The factors that will play into that include how old the home is and what type of wiring is involved. This is because the older the home is, the older the wiring and the more of a fire hazard it becomes. The recommendation in order to get the best rates for a homeowners policy is that wiring within the home be replaced every ten years. If you don’t do that, your house will start to give you indications that the wiring is not functioning at full capacity.

  • Smell a burning odor
  • Sizzle or buzz sound
  • House is over 40 years in age
  • You have fuses that are frequently blown or breakers being constantly tripped
  • Flickered or dimmed lights
  • Plugging or unplugging cords gives you a shock or sparks coming from the outlet

These are signs that there is an issue with the wiring within your home and it’s time to call in a licensed electrician to check about having the wiring replaced. It is also a good idea to check with your homeowners carrier to see about receiving credit towards new wiring.

Conclusion

In order to make sure that your home is covered by your homeowners policy for electrical issues and that you get the most cost-effective rates available, it is best to have a licensed electrician come to check out the type of wiring running through your house, especially if your home is older than 40 years of age.  If the wiring hasn’t been replaced in over a decade, make sure that you go ahead and ask your carrier for a wiring credit and get it done.  You’ll have peace of mind that you’re safe and fully covered.

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