August2017

Common Electrical

Problems in Residential Real Estate By Caesar Mistretta and Chris Dunlap HUB International

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C o-op and condo property owners and managers typically deal with buildings and electrical systems of varying ages and conditions. As to be expect- ed, older electrical systems tend to have lower amperage capacities, fewer safety features, and higher potential for failure. As a general rule, it is recommended that a pro- active electrical preventative maintenance program be in place, conducted by a licensed and insured electrician. Beyond good

not only raise the risk of fire or electrical shock, they can also have a significant impact on what owners will pay for insurance. Many property and liability insurers will refuse to quote policies if certain obsolete equipment or wiring is present. Other companies such as Excess & Surplus insurers, may accept the risk with a higher premium, apply a higher deductible or provide significant coverage exclu- sions on the policy. While many factors go into rating a risk, properties with these obsolete electrical systems or equipment have often seen approximately 30-60% higher property and general liability premiums as a direct result of legacy electrical systems. Due to the significantly higher premiums, remediation can often be in an owner’s best financial interest over the long term. Two of the most common and impactful legacy issues, aluminum wiring and Federal Pacific Electric (FPE) Stab- Lok brand electrical panels, are outlined below, along with remediation methods might be considered to reduce risks.

general electrical maintenance, there are some critical legacy electrical components that can seriously ele- vate the risk of electrical failures in residential proper- ties. These issues

"...properties with these obsolete electrical systems or equipment have often seen approximately 30-60% higher property and general liability premiums..."

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