Many insurance companies deny coverage if a home has aluminum wiring. Homes built prior to 1972 that are wired with aluminum are 55 times more likely to have wire connections at outlets that increase the risk of fire, according to a survey conducted by Franklin Research Institute. Aluminum wiring becomes a hazard when the connection at outlets, light switches and to other wires in junction boxes deteriorates. An insurance company may insure the home if the homeowner completes certain repairs.
Use of Aluminum Wiring
When the cost of copper increased in the late 1960s, many builders began wiring homes with aluminum as a cheaper alternative. Electrical contractors continued to use aluminum wire with terminals and receptacles originally designed for use with copper wire – a combination that increases the risk of fire – throughout the 1970s until the mid 1980s. Although aluminum previously had been approved for interior wiring purposes, some homeowners later changed electrical outlets and switches in the home to those manufactured specifically for use with copper and aluminum wiring. This reduces the risk; however, there are insurers that still deny coverage for homes wired with aluminum.
The metal on the screw terminals of switches and receptacles not meant for use with aluminum wire causes oxidation. Corrosion increases resistance to electrical current. Too much current can then cause wire to overheat at connection points, increasing the risk of fire. As the aluminum wire heats, expands and contracts, the terminals on the receptacles and switches can also become loose, creating another safety hazard.
Detecting a Problem
Insurance companies have become stricter in recent years when it comes to insuring a home with aluminum wiring. Now that both the wiring and the receptacles and switches are getting older, insurers see the home as an increased fire hazard risk. Although there isn’t always obvious warning that an electrical problem exists, in some cases, the faceplate cover on an outlet or light switch may be hot to the touch. You may notice flickering lights, failing circuits or a burning smell near an outlet or switch. Hire a licensed electrician to inspect your home’s wiring. Do not try to fix an electrical problem yourself.
If an insurance company refuses to qualify your home for coverage because it is wired with aluminum, you may be able to obtain coverage by completely rewiring the home with copper wiring. Less-costly repair methods that an insurer may accept include repairing all aluminum-to-copper connections. The Consumer Product Safety Commission recommends using the COPALUM crimp method. The AlumniConn connector is the next-best method for making a permanent repair. An insurance provider may also require that homes with aluminum branch circuit wire connections to the service panel be inspected before insuring the home.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.