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Why Are Federal Pacific Breakers Uninsurable?

You’ve been denied insurance coverage…all because of your electrical panel.

Learn why Federal Pacific breakers (and other panels) are ineligible for insurance.

 

You rely on electricity to power your favorite devices, but it can also be dangerous without the right safeguards in place. In fact, most homeowners aren’t aware of what’s going on in the wires behind their walls.

If there’s an issue with the electrical wiring, many people don’t find out until it’s too late…or until a home inspection uncovers a potential problem.

We’re willing to bet that you’re reading this article right now because you were recently informed that the electrical panel on your home is ineligible for insurance. We’re insurance agents—not electricians—so we can’t pass judgment on the safety of your electrical wiring. But many insurance companies will refuse to issue policies on homes that have certain types or models of circuit breaker (models such as Federal Pacific breakers and Zinsco).

Why is that? And what can you do about it?

 

How Does an Electrical Panel Work?

You know what an electrical panel is and you (hopefully) know where yours is located, but do you know why they’re important?

Electrical panels—also known as breaker panels, load centers, service panels, or breaker boxes—are the housing for your home’s circuit breakers. In the event of a power surge, short circuit, or circuit overload, the breakers are designed to “trip,” which is another way of saying they cut the electricity to that particular circuit.

circuit breaker illustration

While it may be irritating to experience a power outage at the moment you’re trying to make your morning cup of coffee, circuit breakers are a vital safety feature that prevent electrical fires.

If a breaker fails to trip, the high amounts of electricity can melt the plastic coating of the wires and spark a fire. The entire electrical panel can also overheat, which can cause it to catch fire.

Put this way, it is easy to see why having a high-quality, reliable electrical panel is so important.

 

Why Certain Electrical Panels (Such as Federal Pacific Breakers) Are Uninsurable

If you’re wondering, “Will a Federal Pacific panel pass inspection?” the answer is no.

Electrical fires are one of the top causes for residential fires, and cause an estimated 500 deaths and $1.3 billion in property damage each year. This isn’t a risk that most insurance companies want to take on.

In our recent article, “How Does Insurance Work?”, we explained how spending more money on claims means the insurance company has to collect more in premiums. If your home is located in a certain area or has certain features that the insurance company has deemed to be riskier, you will pay higher premiums than homeowners without those features.

There are some features, however, that are more than just “riskier.” And Federal Pacific breakers (among others) are one of them.

Just like the infamous polybutylene plumbing, some electrical panels have cost insurance companies so much money that they simply refuse to insure them. For them, it’s essentially a losing bet.

 

Which Electrical Panels Are Dangerous?

Despite their importance, there have been a surprising number of electrical panel “fails” over the past few decades. In most cases, the panels work fine for years, giving many homeowners the impression that nothing is wrong. In fact, most aren’t aware of what type of electrical panel they have until they get a 4-point inspection.

So, which are the ones your insurance company won’t touch with a 10-ft. pole?

Federal Pacific breakers (also known as Stab-Lok breaker panels) were some of the most widely used electrical panels from the 1950’s until the 1980’s. Yet nowadays, they are popular for an entirely different reason.

Not only do Stab-Lok panels fail to trip during a power surge (failure rates are between 25-65%), they can fail to switch off power when the switch is in the “off” position, resulting in electrocution.

electrical socket with burn marks

Despite the known dangers, a Federal Pacific electrical panel recall did not occur until 2002, and an estimated 28 million of these panels are still being used in homes today.

Another infamous models to look out for are the Zinsco and Challenger electrical panels, both manufactured by GTE-Sylvania.

However, when looking into the safety of your electrical panel, it’s important to look beyond the brand name and into the function of the panel itself.

Building codes have changed since the 1970’s and many older electrical panels simply do not meet modern standards.

Think about how much more electricity your household uses compared to, say, your grandmother’s day. Your WiFi router, Alexa, laptops, cell phone chargers, and gaming console have a much bigger appetite than a 1950’s blender.

 

Replacing Your Electrical Panel

While there are some insurance companies that will provide coverage on homes with these types of electrical panels, most homeowners prefer to have them replaced.

After all, the average cost of replacing an electrical panel is around $1,100 and you’ll have the added benefit of more choices when it comes time to renew your policy.

If you suspect that your home might have a recalled or outdated electrical panel, don’t try to replace it yourself as your weekend project! Instead, have it examined and replaced by a qualified electrician.

 

Conclusion

Electricity is part of what makes our modern-day lifestyle possible. But having good insurance coverage is just as important as having safe electrical wiring.

Whether you need to find an insurance carrier who will accept your current electrical panel or you just want to see if you can get a better value from your homeowners insurance, let the friendly agents at Harry Levine Insurance help!

What Is a Wind Mitigation Inspection?

What is a Wind Mitigation Inspection?

Wind mitigation inspections do more than give Florida homeowners peace of mind.

Find out how a quick wind mitigation inspection can help lower your insurance premiums.

Floridians are well-versed at protecting our homes from hurricane-related wind damage. We secure doors and windows, fill up sand bags, and clear our yards of loose debris.

But most people forget about the biggest area of protection for their home: the roof.

Your realtor or home inspector might have recommended that you get a wind inspection, but what is it? And—more importantly—why is it so important?
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10 home maintenance tips to reduce claims and home insurance rates

10 Tips to Reduce Claims and Home Insurance Rates

There are a lot of factors that help determine your home insurance rates, but none are so easy to control as proper home maintenance.

Taking care of your home prevents wear and tear, damage, and the stress of having to deal with a middle-of-the-night emergency. When your home performs the way it should, you not only live better, you can breathe easier. And so can your insurance company when they consider how much of your risk they are taking on.

More claims lead to higher home insurance rates, so proper home maintenance is one way to keep your premiums down.
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Fraud is Causing Your Rate to Go Up

It seems like every year homeowner insurance costs more. We have talked about this before, but it is still happening and your rates are still going up. Our goal is to make sure everyone is educated about what is happening so you can make informed decisions about your home.

Normally, when people spend money they like to receive something of value in exchange for it. It’s difficult for insurance to provide obvious or immediate value because no one ever wants to have to use it. Everyone’s financial sensibility is vulnerable to ads like the one below that seem to bring that value. A new roof on your home can cost anywhere from $5,000.00 to $50,000.00 depending upon size, materials and contractor. The free roofs that are being promised all across Florida in ads like these, however, are not free at all. In fact, they are incredibly costly to the homeowner and the general public.
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A New Free Roof?…It Must be Too Good to be True

Free-lunch_Guy-Downes-20101

Credit – http://www.guydownes.com

If it’s too good to be true, it probably is.

A stranger knocks on your door.  You apprehensively answer.  They tell you that they can get you a entirely kitchen worth $25,000 or more if you’ll let them inside.  You laugh, say it’s too good to be true and send them on their way.  So why do people allow those making such outrageous claims to climb on their roofs, have access to their insurance policy  information, and ultimately to involve them in a rapidly growing fraud scam?  I suppose it’s because they aren’t be asked to actually invite the perpetrators in, but they are being promised a new roof typically valued anywhere between $10,000 and $40,000.

Insurance is there to protect homeowners from sudden and accidental damage.  Unlike a home warranty or maintenance contract, insurance does not cover wear and tear or an item reaching the end of its useful life.  Insurance is designed and priced to repair or replace a roof if a tree falls on your house, a hail storm causes damage or another sudden, accidental and unforeseeable event damages your home.  Unfortunately, opportunistic and criminally liable contractors are looking for homes with shingle roof at or around 15 years old all over Florida.  These roofs are naturally reaching the end of their lives, and most homeowners dread having to purchase one from within their household budget.  Knock, knock…
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What to do if your house has polybutylene pipes?

Polybutylene pipe

“What do you mean I can’t get homeowner insurance?”

Unfortunately, this line is becoming more common by the day in Florida. Homes are being bought and sold at a quick pace again, and any house built between 1978 and 1995 probably started out with Polybutylene plumbing pipes. If your house has not been re-piped it has been blacklisted by nearly all insurance companies. This isn’t because insurers want to be mean. It is because there is evidence that Polybutylene fails more often than other types of plumbing.
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My Insurance Company Told Me My Roof is Too Old, is it?

You might have some roofing issues!

You might have some roofing issues!

 

  Q.  Why is my insurance company telling me my  roof is too old and that I need to replace it? It  looks fine to me!

A.  Keeping a comfy roof over your head is one of peoples’ highest priorities no matter where they are.  When it comes to homeowner insurance roofs can quickly become a lot more complication than just shingle or tile.  Insurance carriers have detailed data on how long roofs are expected to last, what are the most common causes of roof related claims, and which types of roofs tend to work best. 
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Have You Saved With A Wind Mitigation Inspection?

Douglas Inspection Service logo (1)

We interviewed one of our clients, Douglas Inspection Service about Wind Mitigation Inspections. If you haven’t had one yet you may be able to save money on your Homeowners insurance! You can learn more about Wind Mitigation Inspections on our blog and read about them and Douglas Inspection below!

Q. How long is an inspection?
A. The time spent at the property is usually less than an hour. We do research prior to the appointment and at the home we verify the results of our research and confirm the way the roof is secured to the house. It really depends on how far into the attic the inspector has to go to find and photograph the features the insurer is looking for.
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What is a 4 point Inspection?

 

Q.  What is a 4 point inspection? Can I fail it?

A.  A 4 Point inspection is like a check-up for the vital systems in your home.  The inspection isn’t conducted on a pass/fail basis, but it can reveal areas that need repair.  The 4 points examined are the roof, electrical wiring, plumbing, and heating/cooling systems.  Many homeowner insurance companies require 4 Point inspections once homes reach a certain age.  It’s a relatively easy and inexpensive way to ensure that your home is healthy and doesn’t have any hidden problems that may reveal themselves when least expected.  When you hire someone to do an inspection you make sure they are licensed. We work with a few highly rated and recommended inspectors so if you need their number give us a call!  It is possible that your insurance company may come back and request that you make a change based on the results of the 4 Point Inspection. For example, there are electrical panels that are old and can be a fire hazard and certain types of pipes that are found to leak more so if you have them the company may request that you replace or fix them.