Aluminum Wiring in Houses: What Insurers Need To Provide Coverage

The US Consumer Product Safety Commission reports a sobering statistic: homes built before 1972 with aluminum wiring face 55x higher risk of fire hazard conditions. This reality shapes how insurance companies view properties with aluminum wiring systems today. Many insurance providers categorize properties with aluminum wiring and 60-amp service panels as high-risk, making it challenging for homeowners with such setups to secure home insurance easily. 

After assessing electrical systems in numerous older residences, Brian Cook, an electrician and founder of Vancouver-based PowerCheck Electrical Safety Services, observed that simply having a 60-amp service and aluminum wiring seldom leads to fires on their own. Frequently, these types of wiring do not necessitate replacement to maintain a safe household as long as proper maintenance is conducted.

Nonetheless, concealed electrical fire risks lurk within the majority of older homes, especially those constructed before 1975, heightening their vulnerability to electrical fires.

The story of aluminum wiring traces back to 1960-1970, when copper prices pushed builders toward this cheaper alternative. The decision made economic sense at the time, but decades of experience revealed critical flaws. Unlike copper, aluminum proves more brittle and struggles to conduct electricity efficiently. These properties create perfect conditions for overheating if not properly maintained – the primary concern for both homeowners and insurers.

This is why most insurance providers demand electrical safety certifications before writing a policy, and some companies simply refuse coverage for aluminum-wired homes.

Why Insurers See Aluminum Wiring as a Risk

Let’s examine three key properties of aluminum wiring and why they affect home safety. These characteristics help explain why many insurers hesitate to cover homes with aluminum electrical systems.

• Electrochemical Corrosion ← Click to read more.

• Coefficient of Thermal Expansion ← Click to read more.

• Creep and Relaxation ← Click to read more.

How to identify aluminum wiring

To spot aluminum wiring within your residence, examine the wires in areas where they are visible. Inspect spaces like between exposed floor joists, in the attic or basement, and at the electrical panel.

According to the Alberta Safety Codes Council, one way to recognize aluminum wiring is to inspect the wire covering for the AL symbol or the ALUM mark. If identifying the wiring visually proves challenging, consider enlisting a certified inspector or electrician for further investigation.

Another method to pinpoint aluminum wiring involves uncovering your electrical switches or outlets and searching for marks such as CO/ALR, CU-AL, or AL-CU.

How Canadian Insurers Assess Aluminum Wiring

Canadian insurance companies take no chances with aluminum wiring safety. Most demand thorough electrical inspections at the time of application and will sometimes request an updated report every specified number of years.

What do Insurers Require?

Insurers typically mandate a thorough electrical assessment before providing coverage for a home. They require a compliance report that includes specific details such as: 

• The home’s electrical service amperage size
• Confirmation of compliance of main panel, grounding, and bonding
• Confirmation of correct circuit protection
• The percentage of aluminum wiring in the home and whether it meets standards
• A comprehensive list of deficiencies with recommended actions

Certain insurers may decline coverage for homes with aluminum wiring, irrespective of its state. It’s advisable to consult your insurance broker before engaging an electrician to understand the necessary requirements for your situation.

Inspection Requirements

A licensed electrical contractor should conduct a legitimate house electrical compliance record. These professionals examine every aspect—from overheating signs to loose connections that might spark future problems. 

Without the electrical compliance report document, most companies simply won’t offer coverage or even choose not to renew existing policies. Insurance providers anticipate the electrical expert evaluating a random selection of electrical outlets across the residence, enabling them to formulate an informed judgment on the general electrical framework of the property.

Insurance Underwriting for Aluminum Wiring

Finding an Insurance Provider

Different companies have different requirements for providing coverage for aluminum-wired homes. However, most insurers follow the general rule of thumb: No inspection, no coverage.

Aviva Canada: True to its reputation for thoroughness, Aviva will need a full electrical inspection that states the home has passed safety requirements in the compliance report. In addition, the electrical box must meet the minimum requirement of 100 amps service.

SGI Canada: Since 2021, SGI Canada’s stance has remained clear: new residential policy applications need electrical compliance reports. Coverage flows only after a certified electrician gives their stamp of approval, and once again, the service amp box must be at least 100 amps.

Wawanesa, Red River Mutual, Sandbox Mutual, Portage Mutual, and Peace Hills Insurance: While details vary between providers, proper documentation and safety certifications remain non-negotiable. Each insurer’s requirements for placing coverage vary based on the percentage of aluminum wiring in the home and electrical amp service. 

Insurance Options for Homes with Aluminum Wiring

The quest for aluminum wiring insurance might feel like searching for a needle in a haystack. 

“The market isn’t completely closed off,” says Megan Kaytor, a licensed insurance broker at Harvard Western Insurance. 

The non-negotiable? Professional inspection papers. Licensed electricians must check wire and connection points, hunting for overheating signs, corrosion, or loose fits. These inspection reports speak volumes to insurance providers.

The road splits here: Some insurance companies won’t budge without complete system replacement. Others may show more flexibility, accepting existing aluminum wiring that passes safety checks.

Disclaimer: Insurers can limit coverage or offer higher rates based on wiring risk factors.

“Don’t go it alone,” Kaytor suggests. Insurance professionals know which doors to knock on, which companies might offer reasonable terms, and how to present your home’s safety measures in the best light.

https://harvardwestern.com/home-insurance-quote/

FAQs

How does aluminum wiring impact home insurance? Aluminum wiring can significantly affect home insurance applications and renewals. Many insurers consider homes with aluminum wiring to be higher risk. Some insurance companies may even refuse coverage without proper safety certifications or inspections.

Is it safe to buy a house with aluminum wiring? While aluminum wiring can be safe if properly maintained, it does pose higher risks compared to copper wiring. Before purchasing a home with aluminum wiring, it’s crucial to have a thorough inspection by a qualified electrician to assess its condition and safety. Proper maintenance and potential upgrades may be necessary to ensure safety and insurance compliance.

What are the main risks associated with aluminum wiring? The primary risks of aluminum wiring include electrochemical corrosion, higher thermal expansion rates, and a phenomenon called “cold creep.” These factors can lead to loose connections, overheating, and increased fire hazards over time. 

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