Is Aluminum Wiring Keeping Your Client From Getting Insurance Coverage?

Home inspections often turn up surprising results. Even insurance inspections, like Four Point inspections, often turn up surprises that home buyers and even owners are unaware of. When a home reaches 25 to 30 years old, or 10 years for a manufactured home, it will be required to have a Four Point inspection done to obtain or renew insurance coverage. The electrical service panel is one of the areas of the home that is included in this inspection.

Asidefrom double-taps (two wires under one screw), aluminum wiring is one of the most common electrical panel surprises. There are two basic types, single-strand solid aluminum wiring and multi-brand aluminum branch wiring.

Single-strand aluminum wiring is considered a hazard by nearly all insurance companies and can prohibit your client from obtaining property insurance. It is considered a hazard because aluminum is a very poor conductor of electricity compared to the standard copper wiring. This means that the wires have to be much thicker to handle the same amount of current. The connections between wires are prone to overheating due to becoming brittle and have been known to cause fires.

One of the primary methods of remediating single-strand aluminum wiring is installing COPALUM crimp connectors. COPALUM connectors would need to be installed at every junction box in the home and are “crimped” over any aluminum wire connections. The average home has around 100 junctions, and COPALUM connectors range from $32 to $65 installed per junction box. In order to obtain or renew insurance for these homes, documentation of these repairs will need to be provided to the insurance company. A similar product, Alumiconn, has been used for many years to remediate single-strand aluminum wiring, but is rapidly losing favor with many insurance companies and may not be considered a complete remediation.

The other primary method of remediating single-strand aluminum is rewiring the entire home with copper wire. Some homes are still entirely wired with aluminum, while others only have single-strand aluminum wire to some outlets or switches. This makes it hard to know exactly how much to budget to have the wiring replaced. Our clients have told us that the estimates they have received have been in the neighborhood of $6,000 to $8,000 for completely re-wiring their homes with copper wire.

The other type of aluminum wire is multi-strand aluminum branch wiring. This type of wiring is still used today for incoming service lines and/or dedicated to a major appliance, like a stove or air conditioner. Approximately 80% of the homes that we inspect have this wiring present.

According to our e-mail correspondence with Sandra Starnes, Director for the Florida Office of Insurance Regulation, individual insurance companies have the right to choose whether or not they will provide coverage on homes with this type of wiring. After speaking with several insurance agents, the list of carriers that will cover this type of wiring is very short.

For many owners or buyers of these homes, Citizen’s is often the only option for guaranteed insurance coverage. Even then, getting the policy written can be a major hassle for the client and their insurance agent. We have gotten several calls from clients who have stated that Citizen’s would not cover their multi-strand aluminum branch wiring. Citizen’s issued an agent informational e-mail on March 26, 2011 in reference to this issue that states: “Homes with aluminum main service wires and heavier 240 volt circuits that feed major appliances (e.g., dryers, ranges, air conditioners) are eligible for coverage with Citizens.” Many agents within Citizen’s are still unclear about the differences between different types of aluminum wiring.

Should you or your client have difficulty obtaining insurance coverage over this issue, please call us at (941) 749-1152 and we will be happy to assist you in clarifying the issue.

Click here to find out what the International Association of Certified Home Inspectors (InterNACHI) has to say about aluminum wiring.