When we talk about “electrical damage,” we’re usually referring to either power surges or electrical fires. Home insurance coverage addresses each differently:
If a power surge causes damage to an electronic device in your home and it’s included as a peril in the personal property or contents coverage of your homeowners insurance policy, you’ll most likely receive compensation to repair or replace the item. Make sure the replacement value is worth initiating a claim, as the particulars of your policy may change after you make one.
Electrical fires can be a bit more complicated. While they should be included in your fire coverage, you may find yourself uninsured if the fire was triggered by shoddy electrical work or outdated wiring.
With the average loss per electrical fire around $73,000 in Ontario, that’s not a risk worth taking.
What to look out for when insuring for electrical fires
Will it cover electrical problems?
The Insurance Bureau of Canada considers both “fire” and “electrical currents” to be commonly insured perils, so it’s likely that damages caused to your home and personal property will be covered by homeowners insurance. However, this shouldn’t be taken for granted. The Financial Services Regulatory Authority recommends you carefully read your policy, as similar terms like “electrical surge” and “electrical current” can be defined differently between providers.
Different home insurance covers electrical differently. Some may have limitations based on the electrical appliance that caused the fire. An appliance over 10 years old may not be included in your coverage, and heavily used appliances can be excluded after a few years. Additionally, more common issues stemming from electrical failures like broken bulbs or damaged light fixtures are unlikely to be covered.
How old is your electrical panel?
If you live in an older home, it’s important to check how many amps your electrical service panel serves. In the 1960s, the standard service size increased from 60 amps to 100 amps as the number of electrical devices in the average household increased. If your house is using more than 60 amps of electricity on an older panel, you’ll trip the main circuit breaker, which could start a fire. Older electrical panels also pose a number of fire hazards, including:
- Deterioration of wires
- Build-up of debris on the panel
- Loose electrical connections
- Breaks in the grounding wire
- Old circuit breakers
Due to this risk, insurance companies may require you to upgrade your panel before they provide coverage.