Home insurance for older homes with knob and tube wiring

An older or historic home boasts appealing vintage aesthetics and architectural charm. However, along with the beauty of these classic structures comes the potential challenge of outdated electrical systems, such as knob and tube wiring. This early form of electrical wiring was common in homes built before the 1950s and, while it might have served its purpose decades ago, it now raises significant safety concerns. These concerns can complicate the process of securing home insurance, as many insurers view knob and tube wiring can pose a serious fire and electrocution hazard.

The first step is to have a licensed electrician inspect the system to assess its condition and safety. If the wiring is in good shape, some insurers may still provide coverage, though often at a higher premium. However, many home insurance companies will require that the wiring be upgraded to meet current safety standards before issuing a policy. If replacement is needed, consider getting multiple quotes from electricians for the rewiring job, as it can be a significant but necessary investment in your home’s safety. Once the wiring is updated, you’ll find more insurance options available, often at more competitive rates.

Why do some homes have knob and tube wiring?

Most homes constructed before 1950 — especially homes built from 1880 through the 1930s — used a type of electrical wiring called knob and tube.

“This type of electrical system was prevalent prior to 1940 because it was less expensive to install than other types,” explains Kenneth Gregg, CEO of Orion180 Insurance Services, LLC, in Melbourne, Florida. “Knob and tube wiring contains only a live hot wire and a neutral return wire, versus modern-day wiring that includes a ground wire. The lack of a ground wire is a significant fire hazard.”

Brian McCabe, with Provision Insurance Group in Bingham Farms, Michigan, adds that knob and tube homes also typically have an old-fashioned fuse box with ceramic and copper fuses rated for a specific load. These fuses need to be replaced when blown.

“Knob and tube wiring was very popular before homeowners began needing more power in their homes to operate refrigerators, air conditioners, televisions, computers and other modern electronics that have become standard household items and require more power,” says Mark Friedlander, director of Corporate Communications for the Insurance Information Institute.

Homeowners insurance companies see homes with knob and tube wiring as high-risk.

Why is knob and tube wiring a concern for insurance companies?

Older residences with knob and tube wiring can frequently overload, posing a fire hazard because of the power demands of today’s homes.

“As many older homes have undergone renovations, knob and tube wiring is now often covered with insulation and pushed into close contact with other building materials, resulting in a major fire hazard,” Friedlander cautions.

McCabe points out that the original insulation of these wires can fail over time, with the copper becoming exposed.

“Exposed wiring can be both a fire hazard and an electrocution hazard,” he says. “Also, when a fuse is blown on these older systems, due to a power surge or overload, it must be replaced with a compatible fuse — which are hard to find these days — not just reset, as you can do with today’s modern circuit breaker boxes.”

Can I get homeowners insurance with knob and tube wiring?

It’s unlikely that you’ll find an insurance company willing to provide coverage if your home still has knob and tube wiring.

You may be able to get a type of home insurance called HO-8 or modified form insurance, or limited coverage from a specialty home insurance company. However, many insurance companies will not offer it at all.

“Most insurance companies require homeowners to convert to modern electrical standards within 30 days of purchase. Additionally, most mortgage companies will require this conversion to reduce their exposure as the mortgage holder,” McCabe says.

If you own a home built before 1940 or plan to buy one, your homeowners insurance agent will ask about the home’s electrical system. If it’s been updated to modern codes and standards, you shouldn’t have a problem getting a standard policy.

If you don’t convert the electrical system within that deadline, your insurer may cancel the coverage, McCabe says.

“This will trigger letters to your mortgage holder, which may cancel your mortgage loan. Either way, no one wants to assume the risks involved,” adds McCabe.

Friedlander says an insurer may consider providing coverage but will require an electrical inspection of your home “to determine the condition and functionality of the wiring before an underwriting decision can be made.”

If your insurance company doesn’t ask about your electrical system, you’re still obligated to notify the carrier if you know about older wiring and electrical components in your home.

“Failure to do so would constitute serial misrepresentation and would invalidate your homeowners insurance policy in the event of a claim,” warns Gregg.

Which companies insure knob and tube wiring?

You’ll likely have trouble finding insurance companies that cover knob and tube wiring because of fire and electrocution hazards.

“If you don’t plan on upgrading the wiring and electrical system anytime soon, you will more than likely have to seek out an excess and surplus lines underwriter of personal lines insurance that would be willing to insure your home at a significant extra cost in premiums,” adds Gregg.

If you have an older home with knob and tube wiring, be aware that you may not be able to buy a replacement cost policy. Instead, you may have to settle for a modified replacement cost policy.

“This means that instead of repairing or replacing features typical of older homes, like plaster walls and hardwood floors, with similar materials, the policy will pay for repairs using the standard building materials and construction techniques in use today,” says Friedlander.

“Some carriers won’t insure older homes for the replacement cost because of the expense of re-creating special features like wall and ceiling moldings and carvings.”

If you find an insurance company willing to insure your older home, consider purchasing an extended or replacement cost policy. Friedlander says this will pay a certain percentage over the limit to rebuild your home — 20% or more, depending on the insurer.

“This way, if building costs go up unexpectedly due to a shortage of building materials or construction workers. For example, you’ll have extra funds to cover the bill,” notes Friedlander.

What to do if homeowners insurance won’t cover your home because of knob and tube wiring

The good news is that you can have comprehensive coverage once you upgrade your electrical system.

“By replacing knob and tube wiring with modern electrical wiring, you are creating a much safer environment for your family and preventing many unnecessary risks,” says Friedlander. “The other major benefit is you will be able to purchase standard homeowners insurance coverage and not pay an excessive premium because of your home’s antiquated wiring.”

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