Dimming the Lights on Fused Electrical Systems
Safety Standards
Electrical issues account for the largest proportion of residential fires each year. While the number of properties with fuses continues to decline, there are properties that have not been upgraded. Whether you decide to insure them and if so, for how long are important questions to address.
Homes with fuses date back to the 19th century, but by the 1960s, circuit breakers began to be used instead of fuses. In some respects, that doesn’t seem all that long ago and yet, it is; many changes in the NEC electrical code requirements have taken place since that time. What was safe back then isn’t safe by today’s standards for a number of reasons.
In today’s world, the amperage required to meet the needs of a typical modern home is far greater than what a fused service can handle. This may result in an array of makeshift solutions such as using higher amp fuses, double lugging, use of multiple extension cords, etc., all of which create unsafe conditions. In addition, the gauge of the wiring is designed to handle a certain level of amperage. Without the proper fuse rating, there is the risk of damage to the wiring. This threat may not be visible to the eye if the damage is hidden behind the walls. Older systems may also have two-pronged outlets, one for neutral and one for positive. Without a grounding wire, the risk of electrocution is elevated. While convenient, electrical adapters should not be used as they can also create a dangerous situation.
While certainly not true of every property owner, you may have a policyholder who is the owner of an older home. If some form of remodeling or other work was undertaken, at some point it is likely they were advised to upgrade their electrical system as part of the job. If you know the work was done, but the older electrical system was not updated, some degree of work could have been completed by an unlicensed independent contractor.
Recommendations
So how do you get the information you need to make a decision about coverage?
An exterior inspection and interview may provide the basic information that you require to determine the true level of risk the electrical service presents. When the interior is inspected, tools such as a circuit analyzer and thermal imaging can be utilized to identify areas of concern. Electrical repair or upgrade records can also be requested from the insured. When there is serious doubt as to whether a remodeling or renovation project was completed in compliance with code, you may want to consider placing an open records request with the building department for a history of permits for a given property.
No matter how you obtain the information about the current electrical system, should you decide to accept a risk with fuses, it is strongly recommended that you set a defined time frame for the insured to upgrade their service in order for continued, uninterrupted insurance coverage. We recommend no exceptions to this rule.
If a policy is non-renewed due to inaction on the part of a policyholder, insurance may be secured through another mutual or possibly through a fair plan. Either incorporate acknowledgment that the policyholder could potentially sustain a loss at some point in time. Ultimately, for your business, the ideal measure of success is reflected by the number of policyholders who do take action to upgrade their service based on your recommendations.
In the end, the common goal for you and your property owners is to reduce the likelihood of loss. The combination of inspections, interviews and a firm recommendation to utilize a certified licensed electrician to safely upgrade their system will allow everyone to sleep a little better at night.
Mutual Manager Messenger, Summer 2017