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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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4 Reasons Your Home Insurance Premiums Increased

4 Reasons Why Your Home Insurance Premiums Increased

You haven’t filed a home insurance claim in years…so why do your rates keep going up?

Here are four reasons why your home insurance premiums increased (that have nothing to do with your claims history).

 

Like most Florida homeowners, you probably noticed that your home insurance premiums increased over last year, even though you didn’t file a single claim. What’s up with that?

If you’ve always assumed that increased premiums are caused by increased claims, you’re right. But that’s only part of the story.

There are several reasons why your home insurance premiums increased recently (and why it’s likely they will next year, too) that have nothing to do with how many claims you filed.

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Is slander covered by a homeowners policy

Is Slander Covered By a Homeowners Policy?

Here’s why slander is such a big deal and how to get the protection you need.

 

Libel, slander, and other defamatory statements don’t just happen on TV. They’re very real and very common, especially with social media.

In today’s litigious society, lawsuits are increasingly common, even for seemingly “trivial” things. Which is why it’s so important for homeowners to know that defamatory statements are not covered by your standard Homeowners Insurance policy.

But that doesn’t mean you have to pay for lawsuits out-of-pocket.

Here’s everything you need to know about protecting your family from the financial devastation of a defamation lawsuit.
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Farmers vs. AAA

It’s time for another battle royale, insurance edition! 

In one corner, we have the marketing maven, Farmers, going up against the resilient American Automobile Association.
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Your Quick Guide to Florida Insurance Laws

Settling down in the Sunshine State?

Florida remains one of the most popular states in the country, with roughly 900 people moving to the state every day. That’s 330,605 new residents each year! And frankly, with year-round sunshine, warm temperatures, beautiful sandy beaches, and countless things to do, who can blame them?

But if you’re planning on joining us in this wonderful state, you’ll need to know more than what hours Disney is open. Here are some of the things you need to know about Florida insurance laws.

Keep reading our guide so that you’re prepared for your big move.
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Drone Insurance Covered by Your Homeowners Policy? Think Again!

Every time something useful, cool, and new is invented, there are new dangers that come along with it. Newton’s Third Law of Physics even states that for every action, there is an equal and opposite reaction. Well, guess what? Drones may be the hottest new present for children and tech enthusiasts, and a cutting-edge business tool, but an estimated 80% of them are operating without proper FAA approval or appropriate insurance protection.

drone insurance policy

Photo Credit: khunaspix on freedigitalphotos.net

Drones at home are less of a problem than drones used for business. Remember, once Bob the neighbor pays little Johnny $10 to take an aerial picture of his house, there has been a business transaction. You may not agree, but there was a transaction in the eyes of the court! Insurers are struggling to deal with the new risk posed by drones, whether it is drones running into each other, drones being flown into people or property, or drones having mechanical failure and crashing into people or property. There’s also that whole spying on people thing, despite plenty of existing laws and legal precedents to deal with that (just think cell phone cameras). You may think of drones as harmless, but rest assured, there are some very important things for homeowners and business owners to know about this potential insurance issue.
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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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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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