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NOTE: Reasonable effort is made to ensure the accuracy of material presented on this website.  Electrospec Home Inspections, publishers of "All Around The House", will not assume liability for use of, or dependence upon information such as the following, which may be subject to change at any time, with or without our the knowledge of the publisher.  The issues presented here continue to be the subject of debate, may not apply to every insurance company or every situation, and are subject to change or revision at any time. 

Bulletin # AM96-04

The Bureau’s Ontario Consumer Information Centre is receiving an increased number of inquiries where homeowner policies are being cancelled at renewal or individuals are unable to obtain new coverage in the regular market because of electrical wiring. This is a major concern for the Insurance Brokers Association of Ontario (IBAO) and the Ontario Real Estate Association (OREA) as there are few alternative markets.

Discussions with the Insurance Association of Ontario (IAO), Ontario Hydro, Fire Departments, and electricians confirm that 60-amp services and knob & tube wiring are not necessarily problems in themselves. They recommend inspection to ensure that the wiring is safe and adequate for the usage of the household.

60-amp Electric Services

There are even a few contemporary lower-cost housing developments with 60-amp electric services. The Canadian Electric Code allows for 60-amp service in a dwelling where the floor area, excluding the basement, is less than 80 m² (861.20 sq. ft.); otherwise, a dwelling must have 100-amp service. It is not mandatory for older installations to be upgraded to this standard. Many dwellings of 1,200 sq. ft. or less built in Ontario in the ‘50s and ‘60s are equipped with 60-amp services. Some of these have been upgraded to 100-amp service where only a new service entry and panel were installed, thus the wiring is no different than when the 60-amp service was in place.

Electricians advise that upgrading to 100-amp service from 60-amp service in a smaller dwelling that has been checked by an inspector or an electrician provides little additional benefit but costs the consumer approximately $800+. There are other, more cost effective ways to make a 60-amp electric service safer.

For example, a shunt can be installed so that only one major appliance such as a dryer or a heat pump can operate at a time. Also, the substitution of circuit breakers for fuses can reduce opportunities for tampering or use of fuses rated above circuit capacity.

Knob & Tube Wiring

Knob & tube wiring comprises insulated wires clamped on 2-piece porcelain knobs; each conductor carried separately. Hollow porcelain tubes carry the wires through beams and other combustible materials. Modern electrical codes do not permit this type of wiring. It can present a hazard if tampered with, particularly at unenclosed, soldered and taped junctions. The unsheathed insulation is subject to deterioration; particularly where it is exposed, that is, not enclosed in a wall or ceiling. Worn insulation, of course, presents a shock hazard. Hydro inspections usually require all exposed knob & tube wiring to be replaced using approved permanent wiring.

IBC Standards & Practices Committee

In view of the public concern nationally, this item was on the agenda of its April 11, 1996 meeting. The Committee asked that a bulletin be issued recommending acceptance of 60-amp electrical services and/or knob and tube wiring provided that the wiring is inspected to ensure that the system is effective for the size of the dwelling and lifestyle of the occupants.

Insurance Brokers Association of Ontario

Canadian Insurance E-NEWS on May 6, 1996 reported IBAO’s call for common sense in the evaluation and underwriting of homes with 60-amp services.

IBAO researched the issue in response to a market withdrawal from such homes and found no statistical data to support concern. Ontario Hydro advised that only 4% of electric panel fires occur in homes with 60-amp electrical services. Ontario Hydro also noted that a hazard may arise with any size of service when a circuit is overloaded and/or worn insulation may expose wires.

Recommendation

It is recommended that insurance companies request an Ontario Hydro Certificate or documentation from an electrician that the electrical service is safe and adequate, rather than simply refusing coverage.

Consumers should not unnecessarily be forced to seek coverage in alternate markets.

Editor's Note:   Our experience has been that some insurance brokers will issue a standard policy for homes with 60-amp services and/or knob & tube wiring - sometimes with, and sometimes without any inspection of the wiring. However, today, many will refuse applications involving 60-amp and/or knob & tube wiring - even with a favorable inspection report.

In some cases a broker may not be able to secure coverage from an insurer, while another broker may be able to obtain coverage for the same home... and from the very same insurer!

See also:  Electrical Systems:  Insurance & Electrical

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