Before I start my list I would like to do a quick preface:
This list is not extensive; there are definitely more than 5 insurance issues that are typically found during a home inspection.
This list is not meant to terrify home owners/buyers, it is meant to give them the opportunity to get more information on insurance coverage and quotes from trades.
Key Takeaways
- Old or poorly maintained systems like hot water tanks and roofs can lead to insurance coverage issues.
- Aluminum wiring and problematic piping (like Polybutylene) are common red flags for insurers.
- Unpermitted DIY projects can cause insurance claims to be denied if they don’t meet code standards.
This list is a warning; ignorance or feigned ignorance is not a viable excuse when it comes to dealing with insurance companies.
Saying that you have a newer roof than you actually do, or that you have a different kind of piping or wiring than you do isn’t going to matter when your actual systems fail and you try to make a claim.
You will have thrown away thousands of dollars in insurance payments only to find out you are not covered.
Here are the Top 5 Common Insurance Issues
1. Hotwater Tanks
Damaged Hot Water Tanks are probably the one of the most common insurance issues found in Vancouver homes.
In Vancouver’s lower mainland, thanks to the healthy minerals in our fantastic water, HW tanks have a life expectancy of 8-12 years.
Once your tank hits the 10-year mark, however, underwriters may no longer cover any damage caused to your property by a leaking or flooded tank.
If your tank is located adjacent to drywall, framing, paint, flooring, furnace, storage, etc., this can get expensive.
2. Aluminium Wiring
While multi-stranded aluminum wiring is common, acceptable and still in use today, single-strand aluminum is none of those things.
In the 1960’s thanks to the skyrocketing price of copper, aluminum became the go-to option up to the mid-late 1970s.
Unfortunately, it was noticed after the fact that it expands and contracts at a much greater rate than copper. This allowed every wire attached to every fixture, receptacle, switch, and even the panel itself to be at risk of wiggling loose, causing arching, both a fire and safety hazard.
Because of this, insurance companies will no longer cover homes with this type of wiring unless both ends of each and every wire are replaced with a short piece of copper.
This is called “pig-tailing” and even this ‘work-around’ has lost favour with some underwriters.
3. Piping
The average life expectancy of copper piping in Vancouver’s lower mainland is 25-30 years before it starts to develop pin-hole leaks.
If your pipes fall into this age group, you may not be covered for the almost certain damage that will occur.
Framing, drywall, paint, flooring, belongings and your electrical system are all at risk.
Because they are often slow leaks hidden from view for some time, you are also at risk of potential mould growth in your walls.
Then there is Polybutylene (Poly-B) piping. Thanks again to the escalating cost of copper, the first generation of plastic piping was developed in 1978 and was used extensively throughout BC until 1998.
There are only 1-2 underwriters who will cover this piping, and should you ever make a claim, your pipes will no longer be covered, and immediate replacement will be required.
This is thanks to one of the largest class action suits in USA history against the manufacturers of the product.
The cost of drywall removal (and possibly asbestos testing/remediation), drywall replacement, mudding and painting can be expensive, but if you have radiant in-floor heating, it is guaranteed to be extremely expensive.
All of this makes selling a home containing Poly-B tricky.
4. Aging Roofs
The average life expectancy for a sloped roof with asphalt shingles and a flat roof covered with modified bitumen is 18-25 years, depending upon proximity to trees, weather and proper maintenance.
I get several calls a month from people who need their roofs “sign-off” on by their insurance company in order for the underwriters to renew their coverage with roof coverage included in the package.
Unfortunately many times I am unable to do so due to the state of the roof, and evidence of leakage noted in the attic below it.
5. DIYers AND NO PERMITS
Anything requiring municipal permitting and done so without will not be covered by insurance should any issues causing bodily harm or property damage occur.
If any structural, electrical or plumbing modifications have happened and cause issues, you can be certain that the insurance company will be investigating, and if there is a reason they can bow out of paying out a claim… they will.
Decks, “illegal” secondary suites and electrical panel wiring are some of the most common items that fall into this category.
Also at risk are homes that have been tenanted by DIYers who would rather fix something themselves than bother the landlord and risk having their rent raised.
They often don’t do things correctly, and as they say…
“A little knowledge can be a dangerous thing”.
I hope this list has given some insight, and if you own or are shopping for a home, a home inspection prior to purchase can make sure that you are safe and adequately covered by your home insurance.
