Your electrical panel is essentially the brain of your home’s electrical system. It is the control center of your home’s power and one of the most crucial systems in your home.
Like anything else, your electrical panel can malfunction or break, requiring you to repair or replace it. When the time comes to upgrade (aka replace) your electrical panel, you may wonder whether your homeowners insurance will cover the replacement. Well, that will depend on a few factors.
We’ll shed some light on the importance of an electrical panel, the telltale signs it needs to be replaced and answer your burning question: Will homeowners insurance pay for a new electrical panel?
What Is an Electrical Panel?
The purpose of an electrical panel (or circuit breaker box) is to protect a home’s wiring and prevent electrical shock or fire.
But an updated electrical panel isn’t as effective if it’s connected to old wiring in the home. Outdated wiring, such as knob-and-tube wiring, was popular from the 1800s to the 1930s. Because it doesn’t have a ground wire, it’s prone to electrical fires. In the 1960s and 1970s, aluminum wiring was very common, but it also increased the risk of fire hazards in the home.
Today, copper wiring is the preferred material for electrical systems. If your home has knob-and-tube or aluminum wiring, most insurers will charge a higher premium or deny homeowners insurance coverage until the outdated wiring is removed and replaced.
Will homeowners insurance cover electrical wiring?
As long as you don’t have an ineligible electrical panel, knob-and-tube, or aluminum wiring in your home, your insurance should cover damage to electrical wiring caused by the named hazards listed in your insurance policy.
If the house you want has knob-and-tube or aluminum wiring, ask the seller to replace the electrical wiring before closing to avoid potential issues with insurance coverage.
Does Homeowners Insurance Cover Electrical Panels?
Your homeowners insurance may cover electrical panel replacement depending on your situation and the type of electrical panel.
When you will be covered
Homeowners insurance will typically cover the replacement of your electrical panel if the malfunction was caused by hazards listed in your homeowners insurance policy (usually referred to as named or covered perils). Common risks include fire, windstorms, theft and vandalism.
When you won’t be covered
Most electrical panels last 25 – 40 years. Your insurance will not cover the cost of a new electrical panel if your old one malfunctions because you neglected to take care of it or it breaks.
What Types of Electrical Panels Will Insurance Not Cover?
Over the years, insurers have singled out electrical panels prone to malfunction and increased fire risk. These electrical panels are uninsurable, and insurance companies usually require homeowners to replace them before issuing an insurance policy.
If your home was built between 1950 and 1990, your home might have a circuit breaker panel that has been identified as a fire hazard and will not be covered by your insurance policy.
Electrical panels manufactured by these companies may be ineligible for insurance.
- Federal Pacific Electric
- GTE Sylvania
If there is no record of the last update on your home’s electrical system, contact a licensed electrician to evaluate the age and condition of your electrical panel.
Another way to assess your electrical panel’s condition is to schedule a home inspection. A home inspection will cover more than your electrical panel, but your home’s electrical systems are a core component of any home inspection.
What Are Electrical Panel Fire Hazards?
Replacing an outdated or faulty electrical panel will help protect your home from fire hazards. Electrical systems can become fire hazards, primarily if the electrical panel can’t support the amount of electricity a home uses.
According to the National Fire Protection Association, electrical failures account for almost 13% of house fires and roughly 68% are caused by electrical wiring and related equipment.
Older electrical panels and wiring are even more vulnerable to fires caused by arcing (when electricity jumps from one conductor to another). Since older electric panels and wiring may be worn down or are easily overloaded, they carry an increased risk of fire compared to newer electrical systems.
How To Make Sure You’re Covered: Electrical Panels and Maintaining Insurance Coverage
Even in homes with new electric panels and wiring – electrical fires are still a threat, so it’s important to maintain insurance coverage on your home.
Home insurance will reimburse you for damage to your property. Insurance companies want to know you’re doing your part to minimize risks. Electrical panels should be replaced every 25 – 40 years. If your electrical panel is 60 years old, your insurance company may not cover a claim for an electrical fire.
An insurance company may deny coverage if your electrical systems are outdated. Make sure your electrical panel and wiring are up to code.
When to check your home’s electrical system
Age isn’t the only factor to consider while inspecting or maintaining your home’s electrical system. Keep your eyes, ears and nose on alert for common signs of electrical issues, including:
- Buzzing or humming sounds
- Flickering lights
- Sparks coming from your electrical panel or outlets
- Hot outlets
- Burnt outlets
- Frayed wiring
- Funny odors
Trust your senses. If you detect any of these issues, call a licensed electrician ASAP.
What are signs that an electric panel needs to be replaced?
Your electrical panel may need replacing if:
- Your panel is over 25 years old.
- Your circuit breakers trip frequently.
- You have a small electrical panel (which may lead to overload with increased electricity use in the home).
- You’ve purchased new appliances that require more power.
- Your electrical panel is broken, burnt or corroded.
Time To Find an Electrical Panel Expert
To the average homeowner, an electrical panel may look like a mysterious patchwork of switches and wires, so you should always call a licensed electrician if you have any concerns.
An electrician can tell you if there’s something to worry about and if you need to repair or replace your home’s electrical panel or wiring.
Even if you’re handy and love nothing more than a DIY project, you should avoid replacing an electrical panel yourself. Take advantage of a licensed electrician’s skill and experience to diagnose and fix your problem. Outsourcing the job will likely save you time and money and reduce the risk of property damage or personal injury.
Don’t Play With Fire: Keep Your Electrical System Up To Code
Most homeowners insurance policies will cover electrical fires, provided our panel and wiring are up to electrical code.
Please don’t play with fire and try to replace an electrical panel on your own or do anything that might result in your insurance carrier denying coverage. You should always be on the lookout for any signs of electrical problems, and if you’re ever worried about anything, call a licensed electrician.
If you have questions about what your insurance policy covers, read your policy’s declarations page or contact your insurance agent.
National Association of Home Inspectors. “Knob-and-Tube Wiring.” Retrieved August 2022 from https://www.nachi.org/knob-and-tube.htm
National Association of Home Inspectors. “Inspecting Aluminum Wiring.” Retrieved August 2022 from https://www.nachi.org/aluminum-wiring.htm
Bates Electric. “Electrical Panel Upgrade.” Retrieved August 2022 from https://bates-electric.com/electrical-panel-upgrade/
Down to the Wire Electric. “Electrical Panel Upgrades that Homeowner’s Insurance Will Cover.” Retrieved August 2022 from https://dttwelectric.com/blog/2021/05/25/electrical-panel-upgrades-that-homeowners-insurance-will-cover/
National Fire Protection Association. “Home Electric Fires.” Retrieved August 2022 from https://www.nfpa.org/News-and-Research/Data-research-and-tools/Electrical/Electrical