Why your Homeowners Insurance may not cover your electrical problems!

If you are wondering if your homeowner’s insurance will cover your electrical problems in 2024 then the answer is not a simple one, I’m afraid. In many cases the homeowner’s insurance will refuse to pay out if your home wiring is out of date, poorly maintained or has been subject to excessive wear and tear. In some cases, the insurance will pay out for home electrical problems BUT each home insurance policy is different AND their policy wording may leave wriggle room for not paying for your claim!

1) Why will my homeowner’s insurance not pay for my wiring?

There could be a whole host of stipulations in your insurance policy regarding circumstances under which payment would not take place. Bear in mind that, generally insurance is there to cover unexpected breakdowns, circumstances and accidents and the costs related to these. 

If your wiring is absolutely ancient and has not been tested and inspected by an electrician since the day it was installed then it is highly likely that the wiring system is going to breakdown at some point. This should NOT be a surprise; it is certainly not an accident and is definitely EXPECTED! It certainly will not comply with the latest safety standards and as a result is unlikely to be easily repaired. If your wiring however, is less than 10 years old, has never been interfered with and is just out of home installation warranty then it is fairly reasonable to expect that the system would continue to offer safe service over a much longer period than 10 years. Under these circumstances the electrical system breakdown would certainly be UNEXPECTED, would likely still comply with up-to-date wiring regulations (mostly) and any failure of the system would likely be accidental and not as a result of wear and tear, aging, or poor maintenance. 

It is always important to check your insurance policy wording before agreeing to take out an insurance policy to make sure that the policy fits your needs. If in any doubt over the level of insurance cover that is being provided, talk with your insurer, and ask for clarification regarding cover under specific circumstances. 

2) What kinds of electrical problems should be covered?

In my experience, many home insurance policies are simply ‘emergency’ home insurance policies where only a complete power loss would be covered. Complete power loss would mean that your home electrical system failed completely and there were no lights, no socket outlets and nothing electrical at all was functioning. 
These circumstances usually result from a localised power cut OR a problem with the intake, metering, or mains cables in to your electrical panel or consumer unit. Other home insurance policies will cover you for the loss of a complete circuit. For example, this might be something like the loss of socket outlets in the property. These types of insurance policy are likely to be a little more comprehensive and expensive to take out but are likely to assist you more fully in the event of electrical problems.

3) What would an electrical contractor do when attending?

When an electrical contractor is called to your home, their first actions would be to ask you some questions about the electrical problems, how they occurred and when you first noticed the issue. Many of us are simply trying to help you out as quickly as possible and in lots of cases, we have limited time in the property to try and establish what has occurred and fix it! 

Generally, we as contractors, are not authorised for unlimited time and parts expenses without first submitting a report to the insurers and asking permission to carry out repairs or replace parts. The insurer needs to know the cause of the damage, the extent of the damage and any other factors that may have played a part in the damage. Once the insurer has all this information then they are able to make a decision regarding your claim and its compatibility with the policy wording and claim limits. 

I personally always try and fix the issue immediately on site if it is straightforward and requires no parts authorisation. Some things are simple and quick to fix, disconnect or make safe and that is my main goal. I am often asked “will my homeowners insurance cover electrical problems?” and in truth, I never know. I do know that I generally have an hour to help you and if I can, I will!

4) Would a full rewire be covered under the insurance policy?

In my time working as an emergency contractor for contractor networks and on behalf of insurers, I have not yet come across a situation where the cost of a full rewire was covered by the insurance policy. The circumstances requiring a full rewire would have to be something fairly drastic to mean a complete wiring system needed replacing that was not already worn out in some way. The only possible instance I could think of would be a direct lightning strike causing the wiring to be fried and electrical accessories to be ruined. In the case of a complete and total wiring disaster, the policy limits of your particular insurance cover would have to be checked out. It may be, for example, that you are covered for a specific amount towards a replacement electrical system and have to fund the difference yourself. Again, if in doubt, check with your insurer before taking out any home insurance policy to see what is going to be covered and under what circumstances. 

5) What are my responsibilities as a homeowner?

We all have a responsibility to maintain our homes and take care of things that crop up during everyday life. Fences blow down, plumbing can block and wiring can become old. These things are our general responsibility to take care of under what would be considered normal home maintenance. 

Electrically speaking, you should have your homes electrical system inspected every so often in accordance with local wiring regulations and recommendations. This is part of maintaining a safe and healthy electrical system and ensuring that you and your family are not at risk. Part of this may be replacing the electrical panel when it becomes old, replacing sockets and switches and other electrical accessories and generally ensuring that any highlighted issues in an electrical report are taken care of promptly. 

Electrical contractors in the UK will produce certification, invoices, and other paperwork to ensure that your electrical system has a paper trail and some history of maintenance and upkeep. Many homeowners do not maintain their system by way of inspections and remedial works, do not obtain the required paperwork and as a result, there is no proof that a system has been correctly maintained.

6) Will the homeowner’s insurance pay out if I have maintained the electrics?

Maybe. The question is, how long does an electrical system last? Let’s think about this for a moment. Your electrical system has been meticulously maintained with a fantastic paper trail and all of a sudden suffers complete power failure. Let’s say something tragic happened causing a serious breakdown and the only way to fix it would be to replace the entire wiring system in your home. 

7) How much of that would be the insurers responsibility?

If a wiring system, on average, lasts 50 years and yours has had 25 years of use, should the insurance company pay full price for a complete rewire or should they only really be liable for half of that cost?

The important thing when shopping for homeowners insurance is to talk to the insurers about your needs and expectations. They will normally find a policy that will suit you and you will both understand your obligations under the policy you choose.