There are some concerns about buying an older home that should always be at the top of any homebuyers list, not only because of possible hazards but because they can actually stop you in your tracks when it comes to obtaining homeowners insurance. You might be looking at that original woodwork, the charming cupola, or the mid-century modern of your dreams, but there are problems lurking that only a 4-point inspection can turn up. These inspections are required by Citizens Insurance once a home hits the 30 year mark, and can be required by private insurance as soon as a home hits 40 years.
Why does a home need a 4-point inspection?
Think about your own aging process. You know that wear and tear is a factor on every system in your own body. It’s the same with the systems in your home. The electrical system is kind of like the brain and central nervous system of your house. An electrical panel is designed to cut out whenever there is too much electricity going into a circuit. The problem is that some electrical panels do not do this, and can cause fires. When paired with obsolete aluminum wiring – a hazard that’s been known for decades – the chance of electrical fires can increase dramatically. There is no requirement on the books that requires an older home be code-compliant in order to be sold.
What type of Electric Panels will keep me from obtaining insurance?
There are several different brands of electrical panels that are under scrutiny, such as Zinsco, but the Big Bad in this case is Federal Pacific Electric. The company is out of business, but was found by a New Jersey court to have cheated during product testing to obtain approval of its product from Underwriters Laboratories.
Some additional electric panel and wiring that can cause an issue with obtaining insurance are:
- Fuse Panels
- Knob and Tube Wiring
- Aluminum Branch Wiring
- Less Than a 100 amp Electric Service
When you think about it, how many of your household appliances are 20-30 years old. Is your car 20-30 years old? Expecting an older model electrical panel to handle all your modern appliances, entertainment, and other devices day in and day out for that length of time is not a realistic expectation. You’ll need to make an inventory of everything you expect will run on that panel, and leave room for possible expansion.
When you consider that 30 years ago, there were few home computers, perhaps a television and a VCR, a washer and dryer, a refrigerator, a range, a dishwasher, a hot water heater, and possibly a microwave and other small electrics to consider. The number and variety of electronics has grown, as has the demand of “always on” products. Consider your needs carefully, and then look at your budget and figure on the cost of a new electrical panel and rewiring before you make that offer.