Electrical Panels and Property Coverage Issues

close up photo of electrical panel in a home

    Electrical Panels and Property Coverage Issues

    Learn about the correlation between electrical panels and property coverage issues as carriers aim to incentivize safety and minimize risk.

     

    As insurance carriers aim to incentivize safety and minimize risk, many are taking action to prevent costly fire losses. In narrow focus are the risks attributed to older electrical panels in a home or building structure.

    Many older electrical panels were manufactured using materials and designs that no longer meet modern safety standards. Carriers have taken notice of these potential fire hazards and, in their commitment to protect their insureds, are urging property owners to take steps to reduce their risk.

    Electrical panels play a crucial role in ensuring the safety of a property by housing circuit breakers that automatically trip in the event of a power surge, short circuit, or overload. This immediate disconnection of electricity is essential in preventing electrical fires. However, as panels age, their reliability diminishes making them increasingly dangerous.

    The presence of faulty panels on individual homes and properties may result in significant damage and often leads to increased costs for everyone involved. By recognizing that these losses can be largely avoided by updating electrical systems, insurers have made the decision to classify these outdated panels as uninsurable.

     

    Manufacturers carriers are warry of

    Specific electrical panel manufacturers that deemed unsafe and potentially ineligible for insurance coverage include:

    • Zinsco
    • Federal Pacific
    • Sylvania/Sylvania GTE
    • Pushmatic
    • Challenger
    • Any Stab Lok or fuses

    Federal Pacific breakers are one of the most dangerous panels, as they fail to trip during a power surge and have a failure rate of between 25-65%. Zinsco and Challenger panels are also proving to be dangerous as well in the event of an energy surge.

     

    What insurance carriers are saying

    Over the past several months, property insurance carriers have become increasingly aware of the inherent risk of outdated panels and are looking to improve the safety of their insureds by requiring a change.

    The California Fair Plan, for instance, recently rejected a request for an extension for correction when advised that panel replacement was underway but backordered. This resulted in the policy being cancelled and a request for a new application with proof of compliance when the work was completed.

    Many private and commercial property owners are now replacing their outdated, unsafe electrical panels in order to keep their property safe and their insurance coverage intact.

     

    Next steps for property owners

    By encouraging system updates and addressing potential fire hazards, carriers are working to create a safer environment for property owners and ultimately contribute to the stability and sustainability of the insurance industry as a whole.

    Homeowners should consider a pro-active approach in replacing or certifying the safety of their electrical panels from a qualified electrician.

     

    More information and assistance

    At Morris & Garritano, we’re here to keep you informed about the latest developments in the insurance industry and try to avoid any surprises. Although this may not apply to all insurance companies, it is a trend we anticipate will continue.

    If you’re unsure whether your electrical panel is cause for concern, reach out to our office to get clarification and guidance on what steps to take next.

    When it comes to protecting what matters, our team is here to help every step of the way.

    What "covered" should feel like.

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