Home insurance for older homes when buying a house
What insurers' own pages say about Federal Pacific panels, knob-and-tube and aluminum wiring, polybutylene pipe and old roofs, and what to ask yours.
Updated · By 
Ben Sikes
Can you get home insurance on an older home with known defects?
For an older home, it depends on the finding and the insurer, so ask before your inspection window closes, not after. Send your insurance agent the report lines for a Federal Pacific panel, knob-and-tube or aluminum wiring, polybutylene pipe, or an old roof, and get the answer in writing. Progressive's guide says "some insurance companies may not want to offer you a policy" when a home has knob-and-tube or aluminum wiring.
Have a licensed electrician evaluate the electrical findings before your deadline, whatever the insurer says.
Key takeaways
- Cincinnati Insurance's loss control specialists recommend replacing the entire Federal Pacific panel, by a licensed electrician.
- Citizens in Florida calls new policies on homes over 20 years old with polybutylene pipe "not insurable" on the policy forms it lists.
- Ask whether the roof is covered at actual cash value or replacement cost. In Liberty Mutual's example on an old roof, the gap is $12,000.
Will insurance cover a house with a Federal Pacific panel?
Cincinnati Insurance's loss control page asks, "Why has almost every insurance company taken a stance against Federal Pacific circuit breakers?" Its answer: "They are known for starting fires." The problem is breakers that don't trip. When those problems surfaced in the 1980s, an independent firm's peer-reviewed paper found "28% of the breakers tested failed to trip."
Cincinnati's specialists "recommend that the entire panel be replaced with a modern panel by a licensed electrician." That includes Federal Pacific Electric (FPE) bolt-on panels, which it says should "be treated the same as the Stab-Lok equipment."
To confirm the report, Cincinnati says to look for a "Federal Pacific" or "FPE" label on the front of the panel. FPE's Stab-Lok breakers "are painted red."
Ask your insurance agent two things. Will they write the policy with the panel in place? And does it have to come out before the policy starts? Get a licensed electrician's written bid for the replacement either way.
Will insurance cover knob-and-tube or aluminum wiring?
Two insurers describe both wiring types on their own pages:
| Wiring | American Family | Progressive |
|---|---|---|
| Knob-and-tube | "Some providers will offer coverage for knob and tube wiring while others will deny you outright." | Insurers "may also ask for an inspection report that details the condition of the wiring before providing coverage." |
| Aluminum | "some groups may deny coverage depending on the condition or age of the aluminum wiring." | "some insurance companies will insure homes with aluminum wiring, it may come at a higher premium." |
Progressive's line about an inspection report is the one to act on. Send your insurance agent the electrician's written evaluation along with the report, before they quote. If the fix for aluminum wiring is crimp connectors, the International Association of Certified Home Inspectors (InterNACHI) puts that repair at "typically around $50 per outlet, switch or light fixture."
Quoting with AAA, State Farm or another carrier? Put the same question to that carrier's agent.
Can you insure a house with polybutylene pipes?
Citizens Property Insurance Corporation, a Florida government entity that sells property insurance, draws an age line. Homes 20 years old or newer "may be eligible for coverage with Citizens if there are no signs of leaks, unrepaired water damage, disrepair or hazards." Older homes are "not insurable by Citizens" as new business on the policy forms it lists.
That rule is Citizens' own, for Florida homes. Outside Florida, or with another carrier, ask whether your insurer has an age cutoff for polybutylene and what it is.
Can you insure a house with an old roof?
Coverage and payout are separate questions. On wear, Liberty Mutual's roof guide says: "Because roofs naturally deteriorate over time, insurance companies typically won't cover damage caused by aging materials in your roof that should have been replaced."
On a covered claim, what you get back depends on the policy type. Liberty Mutual's example: a new roof costs $15,000 and a 20-year-old roof has depreciated 80%.
| Policy type | What it pays on that claim |
|---|---|
| Actual cash value (ACV) | $3,000, minus your deductible |
| Replacement cost value (RCV) | The full cost to replace the roof, minus your deductible |
On the ACV policy, you cover the other $12,000 ($15,000 minus $3,000) yourself. The same guide says a newer roof built from more durable materials could cut premiums by 5% to 35% if it qualifies.
Ask your insurance agent which type your policy uses for this roof, whether its age changes that, and whether the insurer has a roof age cutoff. In Florida, state law says an insurer "may not refuse to issue or refuse to renew" a homeowner's policy on a roof "less than 15 years old solely because of the age of the roof."
What should you ask the seller for?
Start from the insurer's written answer. If the carrier will only write the policy once a panel, wiring or pipe is replaced, ask the seller to have a licensed pro do the work before closing, with the permit and final invoice for your insurer. A credit won't solve that case, because the work has to be done before the policy starts. If the carrier will write the policy as the house stands, a credit that matches the pro's written bid works, and a higher premium is one more cost to weigh with the rest of the report.
Kept prices every line of an inspection report for $79, usually under 4 hours, and marks the ones that need a professional quote. What to ask for after a home inspection covers how to size the request around them.
What if no insurer will cover the house?
Get the refusal in writing and ask your insurance agent to quote other carriers. It is a loan problem too: the Consumer Financial Protection Bureau (CFPB) says lenders "generally require proof that you have homeowner's insurance." Tell your buyer's agent and your loan officer the same day. Your contract sets the deadlines, so confirm the dates with your buyer's agent.
If every carrier says no, when to walk away after a home inspection helps you weigh that against the rest of the deal.
Does homeowners insurance pay to replace an FPE panel?
Not for age or wear, going by Progressive's guide. It says panels are "typically covered by your homeowners policy if the damage is the result of a 'sudden and accidental' loss caused by a peril, such as a fire or lightning." It adds: "you typically won't be covered if the damage is the result of age or improper maintenance." Plan on the replacement coming from you or the seller, and ask your insurance agent how your own policy reads.
How do I know what the rest of my report will cost?
Get written bids on the items your insurer flags. Price everything else line by line, so your request to the seller is one total with real lines behind it.
Waiting on your insurer's answer? Upload your inspection report to Kept and have the rest of your repair list priced before you write the request.
Sources
- Cincinnati Insurance, FPE breaker panels
- Liberty Mutual, roofs and home insurance
- Citizens Property Insurance Corporation, polybutylene pipes
- American Family, homeowners insurance and electrical wiring
- Progressive, homeowners insurance and faulty wiring
- InterNACHI, aluminum wiring
- Florida Statutes, section 627.7011
- Consumer Financial Protection Bureau, why homeowners insurance is required
Cost figures are modeled from public wage and materials data unless a line says observed. Kept is accountable for the numbers on this page, and corrections go to support@usekept.com. How we price.