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Suzanne MacD…, Real Estate Pro in Morristown, NJ

When buying a home with aluminum electrical wiring what upgrades must be done in order to obtain homeowners insurance?

Asked by Suzanne MacDowell, Morristown, NJ Sun Mar 25, 2012

I have been advised by three insurance brokers that insurance can only be obtained through the NJ Fair Insurance program AND that the wring must be 'upgraded' within 90 days of closing. I have not been able to confirm in writing what 'upgraded' means. Does it mean pigtaiing? Does the aluminum wiring have to be removed completely and replaced with copper? Does anyone have any recent experience with this issue? I understand it is a fairly recent requirement.

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9
My name is Dennis owner of defined electric, if you do a retrofit using the copalum method you wont have any problems with insurance or underwriters, I am in NM and a tyco certified electrician.
0 votes Thank Flag Link Mon Jul 4, 2016
We're dealing with the same problem in thew DFW area, and I just wanted to add for clarification that large aluminum multi-strand from the hook up, through your meter, and into your main panel box had been and remains the industry standard. This is usually "0000" gauge. It from your main box to circuits inside your home that was and remains the problem.
0 votes Thank Flag Link Mon Mar 7, 2016
Aluminum wiring is not a problem if you get the CPSC approved remediation done (AlumiConn or COPAULUM) with a statement from a licensed electrician AND (this is the hard part) you can find an enlightened insurance underwriter. Turns out there are many enlightened underwriters out there, but the list does NOT include Farmers, Liberty Mutual, Fireman Funds, MetLife or The Hartford. More about that in a moment.

With full disclosure about my remediated aluminum wiring in a beautiful 1976 New Mexico home, I received attractive normal risk quotes from both SafeCo and State Farm. Unlike the underwriters mentioned earlier, these underwriters clearly understood the aluminum wiring issue.

Here is the shady part of the equation. The unenlightened underwriters I mentioned at the beginning, know people are not disclosing aluminum wiring. It is a "don't ask, don't tell" situation. If you have a fire claim, and you have aluminum wiring, remediated or not, Farmers, Liberty Mutual, Fireman Funds, MetLife or The Hartford won't pay the claim. It is all hidden in all of that fine print. I found hidden on page 28 of the policy for my copper wired house.

My advice... be sure you have done the CPSC approved remediation, get a statement from a licensed electrician then find an insurer who gets it. The AlCopstore website lists some insurance companies that get it, and some of those who don't.
0 votes Thank Flag Link Wed Apr 1, 2015
I called most of the insurers listed on the alcop store. None of them cover aluminum - remediatedmor otherwise
Flag Tue May 24, 2016
I'm a 25 year elect vet. You can upgrade alum. wiring to current nec acceptance by doing the following. All devices i.e. switches, receps, GFI w/ devices rated for Co/Au on them. and all taps,wires twisted w/wire nuts must use purple wire nuts, they contain Nolox graphite past that keeps alum to alum from arcing due to heating and cooling when a load is on / off, alum swells and contracts greater than copper so over time a gap can form causing a spark-plug effect and heating and melting the plastic cover on wire this is why it was outlawed in the mid 70's many homes burnt due to the arcing explained earlier. note; when connecting alum to copper i.e. light fixtures, the arcing does no occur due to coppers ability to dispurs heat.
0 votes Thank Flag Link Sun Jun 15, 2014
Thanks, everyone for your answers. I did check with four insurance brokers and none could insure the home unless all the aluminum wiring was removed and replaced with copper, a $20,000 fix! Two of the brokers SAID they could insure the home at first but them did an about face after talking to the underwriter. My client walked away from the deal (no surprise there!).

I still have one insurance broker who swears he can get insurance for a home with aluminum wiring, and a friend and colleague said she got one insured earlier this year, so I suspect this all or nothing underwriting requirement is new. All I can say at this point is, if your clients are considering a home with aluminum wiring, be sure that the owner will either replace it before closing or that you are absolutely CERTAIN you can get homeowners insurance on the property before writing the offer.
0 votes Thank Flag Link Wed May 9, 2012
According to http://www.cpsc.gov/cpscpub/pubs/516.pdf , pigtailing using Copalum method is you only option of remediation, rather than replacing entire wiring. I know this is what was done to remediate few hundreds 55+ condos two years ago in Monmouth county
0 votes Thank Flag Link Mon Mar 26, 2012
With aluminum wiring it will mean removal. Aluminum wiring tends to get very hot.Insurance companies will not want any exposure to aluminum wiring in the house. Actually I am surprised they will insure you allowing 90 days to complete conditions. If you don't rehab the wiring within that time frame they will cancel.
NJ Fair plan is very limited insurance and will not provide liability coverage for you and your family for the house.
If you are getting the 203k, it is wise to allow for the re wiring.
0 votes Thank Flag Link Mon Mar 26, 2012
In our state Missouri we would have to replace the wiring with copper. Inspections for electrical are very strict in our state and many homes built in the late 40’s and 50’s have some aluminum wiring that must be replaced, in addition any boxes (usually Sylvania’s with multi-colored breakers) which have recently lost their UL rating must also be replaced. Check with a master electrician they will know the codes, the remedy and the price to replace.
0 votes Thank Flag Link Mon Mar 26, 2012
I was interested in seeing if anybody responded to this question. In my opinion, check with your insurance carrier, requirements may differ; at the very least I would have a licensed electrician familiar with aluminum wiring review the house electrical system; and make sure all connections are pigtailed... for your safety!
0 votes Thank Flag Link Sun Mar 25, 2012
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