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The Issues With Insuring Older Homes

If you own or are considering purchasing a older home that’s more than 30 years old, there may be some unexpected insurance requirements to consider. Updates to the plumbing, electrical, roof, and heating systems are the most common, and failure to meet the insurance companies requirements could result in you not getting a renewal or a new policy.

These requirements are especially important if you’re trying to purchase the home. If you know that your insurance company is going to require you to do a major update, you should definitely factor that in before you put in a offering price. There are however some insurance companies (high risk) that will accept unsatisfactory older homes, but the insurance premiums could be double, or even triple what they typically should be, and that’s another option to consider.

Galvanized steel pipes (1950’s)

Galvanized steel pipes where used in homes prior to the 1950’s and have a average life expectancy of 40-50 years, which makes most of these pipes outdated and in need of replacement. Over time, the pipes start to rust and corrode from the inside out, resulting in reduced water pressure and restricted water flow. This presents an increased risk of ruptures, leaks, and poor water quality.

60 Amp & Fuses (1950’s)

Using only 60 amp systems with fuse panels was common in homes prior to 1950, which was acceptable for that era. However, these days homes are required to provide electricity for countless devices and appliances that use a lot more power. The larger demand for electricity poses a threat of overuse and overheating, potentially increasing the risk of an electrical fire (the most common type of fire claim).

Knob & Tube (1950’s) 

Just like 60 amp electrical systems, knob and tube wiring is very susceptible  to wear and tear, presenting a serious safety concern. Adding further concern, knob and tube wiring also does not have a ground wire, unlike the current building code standards.

Aluminum Wiring (1960-70’s)

The Canadian Consumer Product Safety Act confirmed that homes with aluminum wiring are 55 times more likely to have a fire hazard, compared to current electrical standards. Aluminum tends to oxidize when exposed to air, resulting in overheating, and eventually failure at the termination points. Aluminum is not as resilient as copper and also has a higher rate of expansion, which can cause loose terminations and connections, resulting in possible arcing, melting and even fire. Breakage, due to improper stripping of the wires or over-tightening of the splices during the installation stage, has created further problems.

Wood Heat (beginning of time)

Most insurance companies will accept wood-burning stoves and fireplaces, but may require the unit to be  inspected by a certified Wood Energy Technical Training (WETT) technician and certified by the Underwriters’ Laboratories of Canada (ULC) or Canadian Standard Association (CSA). Your insurance company may also charge some additional premium for the increased fire exposure.

Oil Heat (1930’S)

Tanks 25 years or older are highly susceptible to rusting, deterioration and leakage and are considered environmental hazards. Insurance companies will have their own guidelines with regards to the quality of the tank, where it’s stored (inside or outside), and what gauge the tank is (10,12,14mm) If a fuel oil leak occurs and goes undetected, the environmental cleanup for such a situation can be immense.

Finding Insurance for older homes

If you are having a difficult time obtaining insurance for your old home, or you’re thinking about purchasing a older home, give one of our offices a call. We will give some helpful advice, recommendations, and will provide a no-obligation quote.