Does Home Insurance Cover Aluminum Wiring?
Homeowners insurance may cover the damage that occurs to your electrical system but can also charge a higher rate or deny coverage for homes with aluminum or knob-and-tube wiring.
Your home’s electrical wiring has an undeniable impact on the safety and functionality of the home. In fact, electrical accidents are one of the leading causes of house fires annually and the damage can be costly.
How your home is wired can depend on the age of the home and its upkeep. Older homes often have aluminum or knob-and-tube wiring which can have a higher risk of fires or other issues. Some insurers may deem your home as higher risk or even deny coverage to homeowners with this older form of electrical wiring. If you have an older home with such wiring, there are several things to keep in mind, and ultimately, it may be in your best interest to replace the wiring to save on your home insurance.
Key takeaways:
- Damaged electrical wiring may be covered by home insurance since coverage often includes damage to the home's structure.
- Home insurers can deem homes with aluminum wiring or knob-and-tube wiring as high-risk and thus charge a higher rate or deny coverage altogether.
What electrical problems does home insurance cover?
Home insurance covers damage from certain perils through dwelling coverage. That means if a covered event like a windstorm damages your electrical panel, your policy could cover the cost to repair it, so long as it’s up to code.
This means if your home uses aluminum wiring (which is often considered outdated), you may want to prioritize paying for this type of coverage.
Just keep in mind that ordinance or law coverage typically covers a limit of 10% of your dwelling coverage amount. So if your policy is $250,000 then your insurance would cover $25,000 for any upgrades required.
What electrical issues are not covered by home insurance?
If electrical damage occurs but the cause of the damage isn’t a covered peril, home insurance is unlikely to cover the cost of the damage. If your wiring is damaged and outdated, then the costs required to repair it and bring it up to code might be partially covered by policies with ordinance or law coverage. Electrical damage from wear and tear, electrical fires, or broken electrical panels due to lack of maintenance is typically not covered by insurance.
Home insurance with knob-and-tube wiring
Knob-and-tube wiring is another form of electrical wiring that’s also considered out of date. Much like aluminum wiring, knob-and-tube wiring is prone to deteriorate due to its fragile nature. This combined with the safety concerns associated with this form of wiring, often result in denied coverage or higher home insurance rates than homes with copper wiring.
Knob-and-tube wiring safety concerns
This form of wiring is prone to potentially dangerous hazards like fire risk, lack of a grounding conductor, and cracking of the porcelain tubes covering the wires. There is also the case that this older wiring can’t handle the electricity demands of modern technology. While knob-and-tube wiring runs on a 60-amp service, most insurers require your home to have 100-amp service.
Additional problems with knob-and-tube wiring include:
- Brittle and flaky insulation
- Frayed wires
- Difficulty accessing wiring in walls or ceilings
- DIY adjustments
- Lack of grounding conductor
Considerations for homes with older electrical wiring
Older homes are most likely to have aluminum or knob-and-tube wiring. When the insurer completes a home inspection, they may ask homeowners to repair or upgrade any damage or wear and tear to the wiring. If you don’t, they could drop your policy.
Still have questions?
Check out the answers to the most-asked questions about older wiring and its replacement.
Can you get homeowners insurance with aluminum wiring?
Homeowners can get insurance if their homes have aluminum wiring, but homeowners will likely get charged higher rates than those with updated electrical wiring.
Should you replace the aluminum wiring in your house?
Homeowners should replace the aluminum wiring in their homes with copper wiring since it is much safer and less likely to cause a fire. It can also help you save money on your premium.
What is the cost of replacing aluminum wiring?
Replacing the electrical wiring of a home can cost about $1,406 on average, while the general range is anywhere between $555 and $2,291, according to HomeAdvisor.
If you live in an older home with aluminum wiring, it may result in denial of coverage or a higher insurance rate since this wiring is riskier to cover. It may even be in your best interest to update your home's electrical wiring for a safer and cost-effective electrical system to light up your home.
Regardless of how your home stays powered, make sure your home is equipped with home insurance that fits the specific needs of your home.
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