The age of the home and the type of wiring will influence your homeowners insurance policy. In terms of risk, the perception is the older the wiring, the more likely it is to be a fire hazard. Knob and tube wiring, and aluminum wiring are early types of wiring that are found in older homes and have limitations, particularly when it comes to modern day usage. As such, carriers see this as an increased risk of fire and potential injury or death. In some instances, they may not extend coverage. Whether you’re shopping for a home or already own a home, it’s important to understand how a home’s wiring might affect your homeowners insurance.

According to the United States Fire Administration, “a strong relationship between housing age and the rate-of electrical fires has been observed, with housing over 40 years old having the strongest association with electrical distribution fires. As of 2015, the median age of one and two-family houses was over 35 years. With more than half of the housing stock older than 35 years, electrical issues are an increasingly larger player in residential fires. In addition, a 2008 study concluded that there are three major areas in older properties that contribute to compromised electrical systems: the effects of aging on wiring itself, misuse and abuse of the electrical components, and non code-compliant installations.”

Knob and tube wiring is one of the earliest residential wiring systems, most commonly found in houses built between 1880 to the 1930s. According to This Old House, knob and tube wiring “has a cloth-covered hot wire and a neutral wire, which run about a foot apart. Ceramic knobs anchor the wires to the house framing; ceramic tubes are used where wires cross or penetrate framing.” This type of wiring “cannot be grounded or spliced into a grounded circuit. Its soldered connections may melt if too much current flows through them. Rewire or disconnect any circuits covered with building insulation; it causes this wiring to overheat.”

Aluminum wiring was prevalent in houses built between 1965 and 1973.  According to the U.S. Consumer Product Safety Commission, homes wired with aluminum are 55 times more likely to have one or more connections reach fire hazard conditions. The fire hazard investigated by the CPSC “occurs at connections with aluminum wire, including receptacles or switches and junction boxes; or the hazards occur with major appliances, including dishwashers or furnaces, for example. There are several deterioration processes in aluminum wire connections that cause increased resistance to the flow of electric current, resulting in damage that is cumulative in effect. That increased resistance causes overheating, sometimes at hazardous levels, when current is flowing in the circuit.”

 

The bottom line is you’ll want to make sure your home’s wiring is in good shape. According to the U.S. Fire Department, there are more than 45,000 electrical fires each year, and about half of those involve lighting equipment or home electrical wiring.  

 

State Farm Insurance offers the following warning signs if you may need to rewire your home:

  • Frequent blown fuses or tripped breakers

  • An over-amped or over-fused electrical panel

  • Dimming or flickering lights, indicating the circuit is overloaded or has a loose connection

  • Hot or disclosed switch plates, cords, or plugs

  • Light bulbs that frequently burn out in a socket, signaling a fixture that can’t handle the bulb wattage

  • Buzzing or sizzling sounds

  • A burning smell

  • Arcs or sparks from an outlet when you plug or unplug a cord

  • Loose outlets

  • Cracked, cut, or broken insulation

  • Electrical shock when you plug in or touch a cord

 

Additionally, State Farm recommends having periodic inspections of your home’s wiring system for the following reasons:

  • If your home is more than 40 years old

  • If you’re relying on extension cords for power

  • If you’ve made major home improvements or added major new appliances that could strain your existing system

  • If your home has ungrounded, two-prong outlets

  • If your home has aluminum instead of copper wiring


As our homes and wiring systems age and our demands for electronic usage grows, it’s good practice to be aware of the limitations of a home’s wiring system. If you expect to replace your wiring system, speak with an insurance agent. By making your home safer and less of a fire hazard, you may qualify for a new wiring credit. Keep in mind, not all carriers offer the same coverages, so regardless of your wiring, it’s a good idea to shop around with different carriers and speak with different agents as to how wiring affects your homeowners insurance and how improvements might earn you a discount. If your home already has updated wiring, you may already be eligible for a discount. In any case, we recommend further research into the specific wiring system of your home (or potential home), your electric demands (appliances or otherwise), and taking whatever necessary precautions to make your home a safer place for you and your family.