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Hypothetical Homeowner's Ins Question

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Crushgroove

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Let's say you have a home built in the early 80's. Let's also say you have a bad 30-amp circuit breaker switch that needs to be replaced, likely original to the home. It gets thrown every time its circuit is active for more than a few minutes and it is generating heat and odor. Let's imagine that while researching how to replace this circuit breaker, you learn that your electrical panel is a well-known fire hazard, used in new-home construction from the 70's-thru-90's, before a class-action lawsuit leveled the company for being the cause of an average of 2,800 fires/year in that same span of time.

At this point, you realize you must replace this box. You call an electrician, he comes to your home to inspect the box and give you an estimate on the replacement. In doing so, he informs you that he can't do the requested work b/c your box location is out of code and a complete box relocation to an approved location and the subsequent re-wiring of your home is in order to bring the entire system up to code. The price tag for such a job is estimated to run upwards of $10,000...

Is this money you'll have to eat or could this be a homeowner's insurance claim since these particular panels are know to be firetraps? I don't have any idea as I'm not especially insurance savy and I've never filed a claim.

TIA and I so wish I was asking for a friend. I am seeking a 2nd and 3rd electrician's opinion before calling my agent, just wondering if someone here ha s a grasp on what my options are.

FWIW, I learned from another electrical company this morning while setting up other estimates that a home on the next block from me, built at the same time, by the same builder and with the same exact electrical panel, burned to the ground 3 years ago due to circuit breaker failure. Would this have any bearing?
 
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crazyqx83_rivals88013

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Likely that the insurance company would use this thread against you if your house burns down and refuse your claim. You now have prior knowledge.

Where is your panel? Moving a panel is a whole house re-wire. $10k sounds about right.

When did you buy the house? Do you have any recourse against previous owner for not disclosing?
 
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Crushgroove

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Oct 11, 2014
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crazyqx83 said:
Likely that the insurance company would use this thread against you if your house burns down and refuse your claim. You now have prior knowledge.

Where is your panel? Moving a panel is a whole house re-wire. $10k sounds about right.

When did you buy the house? Do you have any recourse against previous owner for not disclosing?
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Yeah, I'm not burning my house down. Panel is in the laundry room, but does not have the required 3 feet of required clearance and it shares the backside of a wall that has cabinets in the kitchen, apparently all of which are code violations. The only other space large enough to house the panel and meet code is the garage, which is half the length of the house away.

Purchased in 2006. Purchased from original owner. I knew it was located where it is when I bought, there's no way to prove otherwise. If you walked into the laundry room, you'd have seen it. Code changed in the 90's and I just was not aware it was an issue until today. It's a Federal Pacific Electric panel with the red circuit breaker switches that are reported to have a nearly 80% failure rate. To my knowledge, the original builder is deceased.
 
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JohnBlue

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Not buying the code thing since it's an old house. If you were building new I'd understand. I would talk to your insurance agent, you might be surprised with what they know and he/she could answer your question.
 
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Crushgroove

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Get Bucket$ said:
How did your inspector miss that?
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I'm not sure, either. The furnace is located to one side of the panel and is only about 18" away. It does not share the same wall, but it sits in a corner and is snugged up next to the same wall, if that makes sense. I'm guessing it's a judgement call by the electrician to cover his ***, which is why I'm seeking other opinions.
 
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buckethead1978

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Federal Pacific panels are terrible (you already know this).

Either pray for a minor pipe break that gets in the panel box, leave it alone and hope your house doesn't burn, or take out a LOC and get it fixed.
 
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bluelifer

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For $10k I'd at least make a lawyer tell me it wouldn't do any good to go after the inspector. If the issue is as major as your first electrician said, he should've absolutley caught it imo.
 
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dgtatu01

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You unfortunately do not have a claim because you haven't had a loss as defined by a standard KY homeowners policy.
 
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BBdK

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Homeowner's Insurance isn't a maintenance or home-improvement policy...you're out of luck on that avenue.
 
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Crushgroove

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B.B.d.K. said:
Homeowner's Insurance isn't a maintenance or home-improvement policy...you're out of luck on that avenue.
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I understand this, it just seems that with this particular item and its history, I was wondering if it's more cost effective for the insurer to accept the claim in order to circumvent the potential problem by covering the repair as opposed to full policy payout in event of fire. I was just hoping, I guess.
 
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Get Buckets

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FusterCluck said:
I understand this, it just seems that with this particular item and its history, I was wondering if it's more cost effective for the insurer to accept the claim in order to circumvent the potential problem by covering the repair as opposed to full policy payout in event of fire. I was just hoping, I guess.
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I'd say it's more cost effective for them to let you pay for it. Or if you don't get it fixed to not cover the claim. Just a hunch
 
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Crushgroove

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bluelifer said:
For $10k I'd at least make a lawyer tell me it wouldn't do any good to go after the inspector. If the issue is as major as your first electrician said, he should've absolutley caught it imo.
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From what I've gathered, being out of code in an older home does not fall under home inspection. It can be, but I keep reading that a home inspection is not the same as a code inspection. The panel is fine as-is and I could, technically, just replace the bad circuit breaker, cross my fingers and move on down the road. According to my policy as I am reading it, any damage incurred would be covered even if the box is found to be out of code. It also provides an (up to) additional 10% increase in payment to repair any out-of-code property to up-to-code standard upon repair after a claim is filed.

The problem arises by asking an electrician to work on something that is out of code and risk his license. According to the first estimate, if I want that company to replace the box, the box has to first be made to meet code in order to protect that company's interest.
 
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Crushgroove

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buckethead1978 said:
Can't blame an electrician for not touching it.

Who are you insured with?
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Safeco. And, speaking with my wife this evening, she reminded me that we settled for Safeco, a more expensive option, over our initial choice of insurer- a company we'd been with since the mid 90's- b/c they would not insure a home with a FPE panel in it. Again, it just did not resonate at the time.

I'm going to have it fixed, one way or the other. We plan on being here and we like this house. I'd been saving for a new truck, but oh well.
 
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crazyqx83_rivals88013

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FusterCluck said:
From what I've gathered, being out of code in an older home does not fall under home inspection. It can be, but I keep reading that a home inspection is not the same as a code inspection. The panel is fine as-is and I could, technically, just replace the bad circuit breaker, cross my fingers and move on down the road. According to my policy as I am reading it, any damage incurred would be covered even if the box is found to be out of code. It also provides an (up to) additional 10% increase in payment to repair any out-of-code property to up-to-code standard upon repair after a claim is filed.

The problem arises by asking an electrician to work on something that is out of code and risk his license. According to the first estimate, if I want that company to replace the box, the box has to first be made to meet code in order to protect that company's interest.
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If you've had an electrician look at it already, then you're screwed. If your house burns down and It's tied back to an electrical issue, the chances of the electrician coming forward and disclosing to the insurance company that he recommended replacing it and you ignored that advice, is high. If you call the insurance company and disclose this and basically look for them to pay for it, then they will proba ly either drop your policy or thank you for notifying them so that they can write "fires from electrical service" out of your policy.

Your best bet is to pay for the upgrades and then get an ambulance chaser to help you go after the previous homeowner or home inspector.

Since you're pretty much ******, you might contact the state electrical inspector and get his input on whether he would allow you to replace the exisiting panel in place with a ge or square d (something that isn't a complete piece of ****, like the federal pacific) and use it as a junction box, installing the main panel in a code compliant location. That might save you in cost for the feeders. But if you have an old house and a federal P panel, it's likely that your receptacles don't meet the ground fault and arc fault requirements, so to get a licensed electrician to touch it, you are probably looking at a whole house re-wire.

*the preceding has not been advice rendered under my capacity as a design professional*
 
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Crushgroove

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Second estimate this morning found that the external box with main power switch is also FPE and that the AC unit is powered by a "jumper" from the meter box instead of being switched at the internal panel, which is also a code violation. He said half the neighborhood is wired this way and that, like the electrical panel and its location, this is never an issue until someone has to work on it. When most of these (neighborhood) houses were built, that was still an acceptable practice, which is why insurance covers. Again, the house on the next block burned to the ground due to a panel just like the one in my home and their insurance paid in full.

Regardless, a complete rewire is inevitable at this point. Not much I can do about it if I don't want to live in a firetrap. I have no recourse with previous owner or builder. I will talk to agent today to cover all bases, but, at this point, we're prepared to pay the penalties on a couple of early CD withdrawals and just get it done. Those two don't earn much anyway and what we don't use on the rewire we can likely reinvest in a higher earner. It is what it is, ya know?
 
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ky8335

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FusterCluck said:
Second estimate this morning found that the external box with main power switch is also FPE and that the AC unit is powered by a "jumper" from the meter box instead of being switched at the internal panel, which is also a code violation. He said half the neighborhood is wired this way and that, like the electrical panel and its location, this is never an issue until someone has to work on it. When most of these (neighborhood) houses were built, that was still an acceptable practice, which is why insurance covers. Again, the house on the next block burned to the ground due to a panel just like the one in my home and their insurance paid in full.

Regardless, a complete rewire is inevitable at this point. Not much I can do about it if I don't want to live in a firetrap. I have no recourse with previous owner or builder. I will talk to agent today to cover all bases, but, at this point, we're prepared to pay the penalties on a couple of early CD withdrawals and just get it done. Those two don't earn much anyway and what we don't use on the rewire we can likely reinvest in a higher earner. It is what it is, ya know?
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It sucks but at least you can add some fixtures/receptacles for a minimum cost while they're doing the job.

Wall mount TV with no wires showing, receptacle for hot tub, or even a whole house generator. If you've ever considered stuff like that now would be the time to do it.
 
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Crushgroove

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Happy to report that this issue has long since been resolved as of last spring. Boxes were replaced with beautiful new Eaton boxes and the breaker box didn't have to be relocated far enough to necessitate a complete rewire. It was pricey and inconvenient as all hell, but nowhere near what we were expecting to have to sacrifice.

However, today on 'this old house', it's scheduled annual HVAC maintenance that has ruined my day. I knew the heat exchanger was going bad and needed to be replaced b/c we have to have it cleaned every year anyway and this winter it was really struggling to put out heat. It's ~40 years old and needs to be replaced and that's affordable maintenance I can't complain too much about. But ole boy found that we have a clogged drain on the back of the furnace that has been slow-leaking water that found a crack in the tile grout and has rotted the subfloor under the furnace. Have to pull furnace out to replace floor under it before HVAC will repair it. And, I mean, you know, if you're pulling a 40 year old furnace that leaks and has a bad heat exchanger, only a dumbass would squander the opportunity to have it replaced, right? **** me. I have a brand-new ride in the garage with temp tags still on it, lol.

They can finance up to 5 years at 0%... on anything over $8k. Gee, thanks?

Gonna get some estimates on the floor repair. Hopefully it's pretty well contained and won't be a huge expense, which puts it in the debatable category for filing a claim.

Lots of bad house juju in that damned little 7x8' laundry room. I'm afraid to go in there b/c it costs me money every time I do.
 
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buckethead1978

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State Farm doesn't cover rot either.

Safeco actually might have thrown a 5K minimum at you.

It shouldn't cost very much to cut out and replace the subfloor. Just make sure the joists aren't compromised.

Might be a little moldy in the crawl but most have something growing in them.
 
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Crushgroove

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That's what I'm thinking. It;s tiled and the tile is on a bed of mortar. Have to be pretty badly laid to allow enough water to run and do much widespread damage to the flooring and it should be contained enough around the joist(s) to just brace them on the sides if needed. You can see where it could find its way in around the immediate furnace area, though. And the flooring is just as old as the house. Who knows what they'll find.
 
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buckethead1978

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Rex Kwon Do said:
[laughing]....:(....you didn't really have to say that to him, did you?
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Ha, well, it's true. They often have that endorsement. Now, is it worth paying $1000 to receive $5000 and be tagged by an underwriter as having mold and rot? Probably not.

He should be able to fix the laundry room for $1000-$2000.
 
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UKGrad93

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Jun 20, 2007
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Hey Fuster - I just found this thread and read all of it. Sounds like you really need a good realtor and some moving boxes.
 
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Crushgroove

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UKGrad93 said:
Hey Fuster - I just found this thread and read all of it. Sounds like you really need a good realtor and some moving boxes.
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Hell nah. New roof, electrical system and HVAC in past 7 years? Once we pry the bars off the windows, this'll be a sweet *** crib.
 
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Crushgroove

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buckethead1978 said:
Ha, well, it's true. They often have that endorsement. Now, is it worth paying $1000 to receive $5000 and be tagged by an underwriter as having mold and rot? Probably not.

He should be able to fix the laundry room for $1000-$2000.
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This. $500 deductible and $2500 max unless I can prove I had no knowledge of the leak, then $25k max. Not sure how I could have known or, if I did know, why I'd let it deteriorate to the point of rot, but, I'm guessing it's a safe bet they can find reason enough to deny. Plus, like you said, not worth the claim baggage when there's no way there's more than $3k worth of damage.

It just sucks.
 
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mashburned

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Knowing what you know now, plus the bball catastrophe on Sunday, don't you really wanna burn that sucker down tonight?
 
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