Profile picture for wf_chan

Inspector found aluminum wiring, any insurance company will insure?

My inspector found aluminum wiring on a house I offered.  Seller is upset because his inspector did not find it 6 years ago when he brought it and now, his insurance told him his insurance void.  Not a surprise, I cant find any insurance either.  Is there any insurane company out there will write the policy for it? How much approx? I'm thinking to buy the house and rewire immediately. But I need bank to loan my mortgage. Any thoughts?  (Seller is leaving the country in 2 days and I think if I fix it on my end is easier. Of course, he will have to figure out the math and I'll have to factor into the home sale price now)  My child and I both love this house and we've been searching for 8 months.  She's crying tonight because of the disappointment. Any recommendation is deeply appreciated. Thanks.
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December 14 2012 - Houston
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Answers (23)

Profile picture for Pasadenan
Well, for curiosity I priced the difference between CU devices and CO/ALR devices at Home Depot and Lowes...

CU:
Recepts 55 cents (home depot)
             50 cents (Lowes)
Switches 59 cents (home depot)
              68 cents (Lowes)
3-way switch 76 cents (home depot)
Red wire-nut: 10 cents

CO/ALR
Recepts: $3 (home depot & Lowes)
Switch :  $4 (home deopt)
             $5.2 (Lowes)
3-way switch: $6 (home depot)
                    $6.30 (Lowes)
Purple wire-nut: $120 (Lowes - clearance, apparently not going to be stocked)
Ideal Screw terminals: $2.40 (Home Depot)
                                $3.30 (Lowes)

Both stocked a copper crimp up to 2#12, for about 10 cents, but no crimp tool to use with it.  And the crimp was not labeled for wire type, so one would need to guess..

Neither store offered the pre-manufactured pig-tails.

So, if one had about 12 switches to replace, and about 40 receptacles to replace, would it be more economical to replace the wire in order to use the cheaper devices?  12/2 Romex at Lowes is selling for $72 for 250 ft.  That is about 29 cents a foot.
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September 07 2013
Profile picture for Pasadenan
The CO/ALR rating on outlets and switches takes care of the connections to the outlets, if you just replace those devices and tighten the connections properly.  The CU/AR rating on the breakers is sufficient for connections there.  If you have CU rated breakers only from years ago, as suggested, replace the entire breaker panel... it is cheaper than replacing the individual breakers, and then you will know you have better connections of the breakers to the bus bar as well.

Hidden Metal boxes in walls can be found with a metal detector.  It won't work for plastic boxes though.  Some stud finders can locate them.  But an infrared camera will find them much faster.  Some home inspectors have them.  Some electricians have them.  They are available for rent.  It would be nice to "buy one" but they run anywhere from a couple thousand dollars to over ten thousand dollars, so for an "occasional use" they really are still not in most people's budget.  But a good home inspector should have one as they are not only good for checking electrical, but also HVAC, insulation, window and door sealing, and for water leaks.  They also can see dry rot or other problems behind paint.

For aluminum connections to copper wires at light fixtures, the "high press" connections should be used if one has the tools for that, or the special pig-tails designed for aluminum connections.

Again, see the Wikipedia link provided earlier.
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September 07 2013
I have a rental house with aluminum wiring. We had a licensed electrician put 'Purple' connectors on all the outlets & switches. Also replaces the main breaker box. About 5 years later we has an electrician recheck everything. All is good.
Just need to be careful that the tenants don;t overload a circuit - the new breaker box should do that.
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September 07 2013

The problem with the alum. wire is that it expands and contracts more than other metals, after a while the places where it connects to different metals such as ( but not limited to ) switches and outlets.

In time, during this process of expanding and contracting the connection become loose thus creating a fire hazard. How through arcing and heat.
It should be replaced completely but there are some places that will allow you to use special connectors and install some new outlets and switches.

I personally wouldn't live there till the system was replaced completely
and inspected.
There are reasons why many insurance companies won't insure them.
-Joseph-

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September 07 2013
Profile picture for hpvanc
If you have hidden junction boxes you have a problem regardless of what type of wiring was used. As far as I know hidden junction boxes never met code. Unfortunately there is also no way to know if there are any.
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September 07 2013
Profile picture for Pasadenan
Wikipedia has a good discussion on aluminum alloy's used for wire, and issues with 1960's installations and connections, and some recommended "solutions".

It does mention that some states don't write insurance policies for houses with aluminum wire, and some that have an increased premium for insuring with aluminum wire.

For the 1960's installations, in most cases the devices installed were not rated for the application and need to be replaced.  If they are that old, they would have needed to have been replaced by now regardless.

The article also mentions issues with wire-nuts previously used, not rated for AL-AL connections nor AL-CU connections.  Well worth a read, and for retrofit information.
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September 07 2013
Profile picture for Pasadenan
"are the junction boxes hidden in the walls one would never know about to put in the right wirenuts, anti-oxidant coating, retighten, etc." -

Legally, they can't be "hidden" anywhere, they need to be "accessible", and that includes attic spaces and under floors as well.

If installed by a licensed electrician, they should already have a corrosion inhibitor, and have been sufficiently tightened.  Yes, it never hurts to check again.  I also recommend a "heat scan" with the circuits actually "under load" (using an infrared camera).  You then know if you have bad connections, even if hidden in walls in boxes that were wall-papered over.

Typically, it is not at the wire-nuts that you have problems, unless just not done properly to begin with.  (And if that is the case, it will be just as bad with copper, especially if a neutral was left loose).  It typically is at the connections to outlets and the connections to switches, and the connections to breakers.  Each of those should be checked and tightened.  And if devices are old and not making good connections?  Replace them.  They are "cheep" and "cheep insurance".

I don't know any insurance companies that refuse to insure a system that is installed per code and has UL listings and labeling.  It is easy to document if it is installed safely or not.

Aluminum is a good cost effective conductor when properly installed.  And if you have Romex or knob and tube wiring installed in inaccessible locations?  It often isn't worth the cost to open up walls and ceilings to replace it.
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September 07 2013
Profile picture for user36643677
The wiki on 'aluminum wiring' is most informative.  There are precautions/work-arounds/fixes one can implement but they are questionable.  If I recall correctly, the aluminum wiring they will adequately work with is the Al wiring/alloy of TODAY - not of the 60s/70s.  Anyway, what I have not seen addressed in any of the 'fixes,' are the junction boxes hidden in the walls one would never know about to put in the right wirenuts, anti-oxidant coating, retighten, etc.
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September 06 2013

Before you walk, get an electrician to give you at least a quote of the cost you are facing.  You can then negotiate that with the owner.  Have him put the money in escrow and you get the work done within 6 months of buying the house.

Call USAA and get your insurance quote too.

Naima

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December 17 2012
Profile picture for wf_chan
called 2 brokers and they claimed they have access to 50 insurance companies and none will insure AL wiring.  Seller called his insurance and they told him his insurance is voided if he has AL wiring.  I understand there is still many houses out there wih AL wiring and my guess is the insurance co will not write any new policy for AL.  Or maybe it's different states has different standards?  I felt like I'm in the deep sea and although we love the house, we're starting to think maybe we need to walk. 

I thank you all for the opinions and there is just not much to work on this now.  Sad but thanks.
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December 17 2012
Profile picture for Pasadenan
Aluminum is still acceptable per the National Electric Code, and most States and local jurisdictions of authority adopt the NEC, possibly with some revisions.

The only three issues with aluminum verses copper are:
1) The ratings are about one wire size different, thus you need to make sure you have the correct protection ahead of the wire.

2) Aluminum Oxide is an insulator, not a conductor, thus you need have an oxidation inhibitor put on the wire at the connections, or use special fittings designed for the purpose.

3) The thermal coefficient of expansion for aluminum is much higher than for copper, thus it can loosen lugs and connections if the load changes, as it expands and contracts.  Thus you need to make sure all connections are tight.  Many will put high-press copper tips at the ends of the conductors to help avoid this problem.

I can't imagine any insurance company refusing to insure something that meets present codes and meets all fire and safety tests when properly installed and maintained.

The primary reason people stopped using aluminum wire is it didn't save any money, especially as one needed the next wire size up for the selected load as compared to copper.

Sure gold would be even better conductors than copper, but copper is much more cost effective.  What is used is still primarily determined by cost.
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December 16 2012
AAA - but we are in California.
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December 15 2012
Profile picture for wf_chan
Can you share the insurance company that will insure AL please?  This house isn't that old and build in 1976.  Call 2 brokers and they claimed they had 50 insurance companies and none will insure AL.  Does different states make a difference on this?  We're in Houston Texas.  Thanks.
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December 15 2012
Profile picture for user0804579
My house in DFW has Aluminum wiring, built in the 60"s. We knew when we bought it- inspector told us. We have had electricians look at it. Our insurance is USAA, they sent a person to inspect it before they insured it. No problems.
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December 15 2012
I have aluminum wiring in my house and there is no issue with the insurance company. So does everyone on my block - and they all have insurance.

I have neighbors who are also electricians, and they dont care, they have it also.
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December 15 2012
Profile picture for wf_chan
I guess my concern is... if we did not disclose AL and when we had incident that happens and need to claim, our insurance will be void.  That's what seller is now facing. 

Worse come to worse, I'll give up the house but I dont want to challenge that moment when I file a claim. 
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December 15 2012
How does an insurance company know there is aluminum wiring?  They don't normally go into that much detail or ask to see any inspection report.   This is not uncommon in certain areas and certain age of homes.  I believe these were built in the 1960s.   I don't know the ends and outs of the codes and safety, but I think if installed properly it obviously has not been an issue for many.    I remember one electrician telling me there are some specific ways certain things have to be done.  Also that sometimes plugs where out over the years and must be replaced.

Potentially you could rewire the house, but that can be costly and perhaps not even needed.  Check with your electrician to make sure everything is up to code and installed properly.
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December 15 2012
Profile picture for wf_chan

Maybe you're right Trump.  If we want to work on it, the easiest way to do to just not to disclose AL.  I was wondering if anything we could do so not to take a chance.  Anything happen to the house, it'll be the worse in life :-(

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December 15 2012
Profile picture for Trump Junior
I may not be an expert, but since when does the mortgage company have to be told about anything at all on the inspection report.  The only document they have to see is the appraisal.  Since both buyer and seller want to do the deal, why tell the bank or insurance company about the aluminum wiring? 
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December 14 2012
Profile picture for wf_chan

If seller really to lower the price, currently it's 270K.  How much lower to make it worthwhile?  We really like the house and wanting to try our best.  The house is a duplex build in 1976.

Thanks...

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December 14 2012
Profile picture for wf_chan
seller agent was pushing for only outlet changes and she claim that will solve the problem.  I personally dont think so but would like to hear opinions.  Does insurance accept that as an alternatives?
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December 14 2012
That is the reason for Home Inspections.  The seller will have to fix the property if he wants to sell it.  You may find an electrician for him who would not mind getting paid at closing from the HUD in the event that the seller does not have the cash to do it.
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December 14 2012

The seller should have an electrician upgrade the wiring, otherwise your loan will most likely not be approved. I would not recommend you taking on the expense, just in case your transaction does not close.

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December 14 2012
 
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