‘Don't wait until you get canceled': Bay Area homeowners could lose insurance coverage for having this 1 outdated electrical system — here's why it's a risk and how to stay insured
California homeowners are already struggling to maintain homeowners insurance, as wildfires, extreme weather and aerial drone images can increase the risk of policy cancellation.
Now, ABC 7 News reports that Bay Area homes with knob-and-tube wiring — a dated electrical system — face an even greater risk of cancellation.
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"If we put it on the application, we are going to get declined," Jerry Becerra, an insurance broker at Heffernan Barbary Insurance Services, told ABC 7 News. "I tell people it's best to be proactive. If you've got knob-and-tube in your building, don't wait until you get canceled."
Most homes in San Francisco were built before the 1950s and have knob-and-tube wiring, creating a massive headache for many homeowners.
So, why is this a risk?
Knob-and-tube (often shortened to K&T) wiring is an outdated electrical wiring system used in homes built from the late 1800s to the mid-20th century, according to the International Association of Certified Home Inspectors. It consists of single-insulated copper wires running through ceramic tubes connected to ceramic knobs installed on wood beams of the home.
While it was considered safe when installed, K&T lacks a grounding wire, making it more susceptible to electrical faults and fire hazards, especially when modified or covered with insulation. Many insurers consider it a liability, leading to higher premiums or outright policy cancellations.
Without insurance coverage, homebuyers cannot get a mortgage unless they use the California FAIR plan, a last-chance insurance option provided by the state. The FAIR plan is more expensive and offers limited coverage for most homeowners.
However, some Californians argue that K&T is safe. John Peters, a long-time electrician, has K&T in his home and insists it's not a problem.
"I have it in my house, I'm going to keep it there, I hope, forever," Peters told ABC reporters.
Even the fire department reports no increase in risk. ABC 7 News spoke to the fire department, which shared this statement:
"The department has not seen trends in knob-and-tube electrical wiring residential structure fires, according to our fire department investigators."
However, insurance companies insist K&T is a fire risk and are refusing to cover homes with this type of wiring. Becerra told ABC reporters that homeowners who do nothing to update their knob-and-tube wiring can be sure of one outcome:
"They're going to get canceled or declined."
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If your home still has knob-and-tube wiring, it's best to get ahead of the problem. Start by finding out if insurers are canceling policies for K&T homes in your area.
In some states, insurers may offer coverage as long as most of your electrical wiring has been updated, even if some knob-and-tube remains. If you're concerned about coverage or want to reduce your risk, here are some steps to take:
Get an inspection: Have a licensed electrician assess your wiring. Some older systems are still safe, but if they are deteriorating or overloaded, replacement may be necessary.
Consider upgrading: Replacing K&T with modern wiring can make your home safer and may help you qualify for lower insurance rates or discounts. Some insurers require proof of replacement before renewing coverage.
Shop around for coverage: Not all insurers have the same policies regarding K&T wiring. A broker may help you find a provider willing to insure your home while you plan upgrades.
Look for other outdated systems: Old plumbing, aging roofs and outdated heating systems can also lead to higher premiums or coverage issues. Addressing these can improve safety and potentially lower insurance costs.
Install modern safety features: Smoke detectors, fire extinguishers and whole-home surge protection can help offset insurance concerns and demonstrate that your home is at lower risk.
California homeowners should act now — waiting until cancellation could leave you scrambling for coverage or uninsured. If you live in other states, research insurance policies and find out if K&T could cause issues down the road. Addressing problems now can save you money and stress in the long run.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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