Guides
Old wiring, electrical fires and insurability
A fire from bad wiring is a covered fire loss, but the wiring is not, and old systems can get a home declined or nonrenewed. What insurers ask for.
A fire caused by faulty wiring is a fire loss, and a standard homeowners policy pays for fire damage to the house and your belongings whatever started it. What the policy does not pay for is the worn-out wiring itself, and it does not stop an insurer from declining, surcharging or nonrenewing a home whose electrical system looks like a fire waiting to happen. For owners of older homes, the practical issue is usually insurability before a loss, not coverage after one.
This guide describes the ISO HO-3 (form HO 00 03 05 11). Underwriting rules are set by each insurer and vary widely, so treat the examples as illustrations and ask your own agent what applies.
What the policy pays when wiring starts a fire
Fire is the simplest covered cause of loss in the form. On the dwelling, Coverage A is open-perils, so fire damage is covered unless excluded. On belongings, "fire or lightning" is the first named peril on Coverage C. Smoke and soot damage from the fire are part of the same claim; see fire and smoke damage: how homeowners insurance responds.
The wiring itself is a different matter. The HO-3 excludes loss caused by wear and tear, marring and deterioration, and by mechanical breakdown, latent defect or inherent vice. Brittle insulation, a corroded connection or an overloaded circuit that fails is a maintenance problem, and the cost of fixing the circuit is usually yours. The same form says that any ensuing loss not otherwise excluded is covered, and a fire is the ensuing loss that gets paid.
Two related points:
- A short circuit without a fire is a thinner claim. The Coverage C peril for damage from artificially generated electrical current excludes tubes, transistors, electronic components and circuitry that are part of appliances, computers and similar equipment. See lightning and power surge damage.
- The insurer will investigate. For a significant fire it is routine to have a cause-and-origin investigator, sometimes an electrical engineer, examine the scene. If the evidence points to a defective product or poor work by an electrician, the insurer may pursue that party through subrogation after paying you. That is why you should not clear out the panel, the burned wiring or the appliance before the investigator has seen them.
How common is it?
The National Fire Protection Association estimated in a February 2022 report that fire departments responded to an average of 32,620 home fires per year involving electrical distribution and lighting equipment in 2015 to 2019. Those fires caused an average of 430 civilian deaths and 1,070 civilian injuries a year and an estimated $1.3 billion in direct property damage. Wiring and related equipment accounted for 68% of the fires, and arcing was the heat source in 73%. Bedrooms were the most common place of origin, followed by attics or ceilings and wall assemblies or concealed spaces, which is where faulty wiring can burn for a long time before anyone notices.
What underwriters look for
Most insurers ask about the age and condition of the electrical system on the application, and some order an inspection. The usual trouble spots:
| Item | Why insurers care | What often happens |
|---|---|---|
| Knob-and-tube wiring | Old insulation, no ground, often buried in attic insulation | Can be ineligible at some carriers; others want it removed or replaced on a deadline |
| Aluminum branch wiring | Connections can loosen and overheat | Often requires documented repair or copper replacement |
| Fuse boxes and low-amperage service | Limited capacity, easy to overload or over-fuse | Panel upgrade may be a condition |
| Certain older panel brands | Breakers that may not trip as designed | Replacement may be required; see Federal Pacific, Zinsco and other problem electrical panels |
| Cloth-insulated wiring, ungrounded outlets, DIY splices | Deteriorated insulation, unknown workmanship | Electrician's report or repair |
For aluminum wiring there is a government source. The Consumer Product Safety Commission says in its publication on repairing aluminum wiring that homes built before 1972 and wired with aluminum were 55 times more likely than copper-wired homes to have one or more outlet connections reach "Fire Hazard Conditions," according to a Franklin Research Institute survey. It adds that cable installed between 1965 and the mid-1970s may contain aluminum branch wiring, and it recommends permanent repair by a qualified electrician: complete replacement with copper, the COPALUM crimp method, or the AlumiConn connector method (see the CPSC publication). Other repair methods are not among the three CPSC approves, and an underwriter reading an electrician's report will notice the difference.
Insurers that publish rules are a useful illustration. Florida's Citizens Property Insurance Corporation, the state-backed insurer of last resort, requires a four-point inspection for applications on properties more than 20 years old, by a Florida-licensed inspector, and says on its aluminum wiring page (updated April 2026) that multi-strand aluminum wiring is acceptable while single-strand aluminum branch circuit wiring is not, unless the work is documented as a complete copper rewire or a COPALUM or AlumiConn repair. Private companies set their own rules, and the details differ. See four-point inspections for older homes and Florida for more on how that works in practice.
If your insurer flags the wiring
Underwriting notices come in a few forms: a decline at application, a conditional renewal that gives you a deadline to fix something, or a nonrenewal. The right response is to separate the electrical problem from the insurance problem.
- Read the notice for the exact item and the deadline. "Update the electrical" is not a finding. Ask which item, what documentation will satisfy them and by what date.
- Hire a licensed electrician to evaluate the system and put findings in writing. An evaluation may show that a targeted fix, such as replacing one panel and a handful of circuits, is enough, which is cheaper than rewiring a house.
- Pull permits for the work. An inspector's sign-off is the document an underwriter trusts most.
- Send the insurer the paperwork: the electrician's report, the permit final, dated photos of the new panel and any manufacturer information.
- Ask for the decision in writing, including whether the conditional renewal or nonrenewal is withdrawn.
- If you cannot fix it in time, use the nonrenewal action plan, read your home insurance was nonrenewed: what to do now and ask an independent agent about carriers with different guidelines.
If you are buying an older house, ask the inspector about the electrical system before closing and ask an agent whether the home is insurable as it stands. check insurability before you buy a house explains the order of operations.
What a hypothetical upgrade decision looks like
Say you buy a 1950s house with a fuse box and some cloth-insulated branch wiring, and three carriers decline it. A fourth will write it if the panel is replaced within 60 days. These are the options in front of you, not prices.
| Option | What the insurer sees | Trade-off |
|---|---|---|
| Replace the panel and the worst circuits now, with permits | An updated system with documentation | Upfront cost, but the standard market may open up |
| Full rewire | Modern wiring throughout | Highest cost and disruption, best result for insurability and safety |
| Take a conditional policy and upgrade within the deadline | A promise to fix | Needs money lined up before the deadline |
| Insure through a state-backed plan or surplus lines carrier | A hard-to-insure risk | Coverage now, often at a higher price or on narrower terms; see FAIR plans explained: the insurer of last resort for homes |
None of these options is a claim. Insurance does not pay to upgrade wiring ahead of a loss.
When code upgrades are covered
After a covered fire, repairs to an older house may trigger a requirement to bring wiring up to current code. Ordinary replacement cost does not include the added expense of complying with building codes. The HO-3's Ordinance or Law additional coverage lets you use up to 10% of the Coverage A limit for those costs. Ask your agent whether you have that coverage, and see ordinance or law coverage: paying to rebuild to code.
Key takeaways
- A fire caused by faulty wiring is covered under the fire peril, but the worn-out wiring itself is not, because the HO-3 excludes wear and tear, deterioration and mechanical breakdown.
- Knob-and-tube, aluminum branch wiring, fuse boxes and certain old panels are the items insurers most often flag, and each insurer sets its own rules.
- NFPA reports 32,620 home fires a year involving electrical distribution and lighting equipment in 2015 to 2019, with wiring involved in 68% of them.
- When an insurer flags your wiring, get a licensed electrician's written findings, pull permits and send documentation before the deadline.
- Preserve burned wiring and appliances until the investigator has examined them, because the insurer may seek recovery from a responsible party.