INTRODUCTION
Aluminum wiring was commonly used in buildings during the 1960s and early 1970s because it was more affordable than copper and had good electrical conductivity. However, over time, it was found that aluminum wiring could pose safety risks, leading to changes in building codes and wiring practices. It's important to note that while aluminum wiring was compliant with codes at the time of its installation, upgrades or modifications may necessitate adherence to current standards. What that means is that a building can have aluminum wiring and be up to code but that does not eliminate the safety and fire risks associated with the wiring which is why it may affect the insurability of a building from an insurance perspective.
FIRE HAZARDS ASSOCIATED WITH ALUMINUM WIRING
Aluminum wiring poses several fire risks due to its physical properties and installation characteristics:
Thermal Expansion and Contraction
Aluminum expands and contracts more than copper with temperature fluctuations, leading to loose connections over time. This looseness increases electrical resistance, generating heat that can ignite surrounding materials. The Consumer Product Safety Commission (CPSC) reports that homes with pre-1972 aluminum wiring are at a550% higher risk of outlet fires compared to those with copper wiring.
Connection Failures
The malleability of aluminum makes it prone to nicks and cuts during installation, which can lead to poor connections. Overtime, these compromised connections can overheat, potentially causing fires. The Electrical Safety Authority notes that aluminum wiring is safe if proper connections and terminations are made without damaging the wire.
Oxidation Issues
Aluminum readily forms an insulating oxide layer that can impede electrical conductivity if not properly managed during connection. This can lead to overheating and increased fire risk. InterNACHI highlights those poor connections cause wiring to overheat, creating a potential fire hazard.
INSURANCE CHALLENGES AND CONSIDERATIONS
The presence of aluminum wiring significantly impacts insurance coverage:
Increased Premiums
Insurers may charge higher premiums for properties with aluminum wiring to offset the perceived elevated risk. Most insurance companies will charge higher rates or deny coverage if your home has aluminum wiring.
Coverage Exclusions
Some policies may exclude coverage for damages directly related to aluminum wiring, leaving property owners financially vulnerable in the event of an incident. Harvard Western Insurance highlights that certain insurers may decline coverage for homes with aluminum wiring, irrespective of its state.
Denial of Coverage
Certain insurers may refuse to provide coverage altogether for properties with aluminum wiring, viewing it as too hazardous. Wise Insurance Group points out that many insurers will not write a home policy on a home with aluminum wiring.
MITIGATION STRATEGIES TO ENHANCE SAFETY AND INSURABILITY
To address the risks associated with aluminum wiring and improve insurance prospects, property owners should consider the following measures:
Complete Rewiring with Copper
Replacing aluminum wiring with copper is the most comprehensive solution, effectively eliminating associated risks. However, this approach can be costly and disruptive, making it essential to assess feasibility based on the building's occupancy and financial factors.
Approved Repair Methods
COPALUM Crimp Method
This technique involves attaching a short copper wire to the existing aluminum wire using a specialized crimp connector, creating a secure connection that mitigates fire risks.
AlumiConn Connectors
These connectors provide a safe and cost-effective alternative by securely joining aluminum and copper wires, reducing the likelihood of overheating and electrical fires.
Electrical Assessments
Engage qualified electricians to conduct regular inspections, identifying and addressing potential issues such as loose connections or signs of overheating. The Electrical Safety Authority emphasizes that aluminum wiring is safe if proper connections and terminations are made without damaging the wire.
Insurance Consultations
Collaborate with insurance providers to understand coverage implications and ensure compliance with policy requirements, potentially leading to more favorable terms. Harvard Western Insurance advises consulting your insurance broker before engaging an electrician to understand the necessary requirements for your situation.
CONCLUSION
Aluminum wiring presents significant safety hazards and insurance challenges for property owners. Proactively addressing these issues through appropriate remediation methods and ongoing maintenance is crucial to ensure occupant safety and protect property investments. Engaging with insurance carriers to understand specific coverage implications and taking necessary corrective actions can lead to more favorable insurance terms and reduce potential liabilities.
Kevin Smits serves as Executive Vice President at Howard Insurance. He can be reached at info@howard-insurance.com.
This paper is strictly for educational purposes and does not amount to legal or tax advice.
