Fire Insurance vs. Homeowner Wiring

[Doug]

This question is being asked as a 'inquiring mind wants to know' deal, so here goes. If a person does faulty wiring in the house or garage and it burns down AND the wiring is found to be the cause, does the insurance company have the right to refuse payment? I wonder how this would work. How would the insurance company know that the current homeowner was responsible for the wiring and that it was not a pre-existing condition?

I've read on this forum of the insurance company refusing to pay in the case of homeowner error, but I've never seen a documented case of it.

I've never seen a documented case of an instance where a person installed a stereo in his/her car and was refused payment because the wiring shorted out and the car burned, either.

I had this conversation yesterday with a friend while installing a 240V line for his compressor and we're both interested in how this insurance thing works.

 

[mike93lx]

Read the policy for exclusions. Outside of that, all you will get are guesses and opinions.

Insurance can cover a lot of things, including stupidity.

 

[Showkey]

Faulty DIY wiring, poor fuel line install, loose battery etc in cars is a very common problem and cause for fire or damage. Have seen over 400 confirmed cases where insurance came after theManufacture or dealer ( both) in subrogation. After the investigation dust settled the insurance paid for the repair or replacement of the vehicle.

Same for home insurance where the vehicle, power equipment, tools are suspected to be the cause for the home fire. Filling a lawn mower with fuel while it’s running in a garage is covered as far stupidity along with 100’s of other less safe activities. Extension cord usage is a very very common fault when the dust settles.

Any lithium batteries, garage door openers, heaters, shop vacs, power equipment, vehicles of all kinds are a few of the insurance company favorite targets.

Many times the fire is origin area known either specific or generally. Often the exact cause is undetermined. Especially in shop and garages. insurance will invite every manufacturer of every device known to be in that shop to the “investigation party” hoping to find another company to pay the bill.

When a new cars burn……the first place they look is the owners credit situation.

 

[vavet]

Going off on a bit of a tangent here...this used to be a big thing in aviation circles. A private pilot would go and rent a plane or even borrow a plane from a friend. The insurance on the plane covers the loss to the plane's owner - whether it's the business at the airport that rents hangars and sells fuel or a private individual. If the non-owner pilot damages the plane, the insurance company will pay for the damage, but then might pursue the pilot who was operating the plane at the time. This is why renter's or non-owner's insurance is a thing.

I've been away from aviation for several years, but I can't imagine it's gotten any less litigious.

 

[CSRPenFab]

I've worked in commercial insurance for the past 35 years (Safety/Loss prevention). I have never heard of a personal lines (homeowner) claim being denied from a fire caused by faulty homeowner wiring. They will deny claims such as water damage caused by the homeowners failure to maintain the property.

The covered peril is fire, it burns the house down... The cause may have been faulty wiring, but the carrier is not going to deny coverage if it's the homeowners fault. If the fault belongs to an electrician or someone else who worked on the house, they would subrogate to collect the loss, but not from the homeowner who is the insured.

 

[NUTTSGT]

Never seen a claim denied for poor wiring by homeowner.


Insurance pays for A LOT of stupidity.... mainly piss poor handling of cigarettes and their ashes.

 

[dcg9381]

To me, part of this is procedure. Lets say there is a "total loss". Is the procedure to then figure out who wired the home? In areas like mine, that information isn't available.

So for another area lets say that the home had an electrical permit that passed inspection. It's going to be an up-hill battle to claim "faulty wiring" after the fact. Even if the home owner "added" wiring after that initial permit and inspection, how do you sort out what was added and what was covered by the inspection?

Does insurance cover "stupid"? I think it does. Generally speaking. Just not "intentionally stupid".

There are lots of anecdotal "insurance won't cover that" (in addition to aviation). Some of my favorites are:

1) Towing an RV that when your truck and trailer has a GVWR of over 26k. I've seen it commonly claimed that insurance won't cover drivers that don't have a Class-A license. Frankly, I'd guess that this would leave "most" drivers of these rigs essentially uninsured, but that doesn't seem to be the case.

2) Towing over gross and have an accident. Again, I see rigs all the time that are over weight limits (usually rear pin weight) but I have not seen ACTUAL instances where claims are denied.


Is it possible that you're uninsured? I suppose. And I don't agree with being willfully ignorant... To me, it's more about liability. If I hit someone and I don't have the required DL or if my setup is over gross weight, that's negligence, but I don't think I'm uninsured...

People who drive drunk are neglegent, but insurance pays those claims too.

 

[Doug]

After reading the responses to my original post, it appears that what I thought is true.....Claim denial for stupidity or negligence is covered, except in rare instances. I will show this thread to the friend that I helped properly wire the 240 circuit for and I will henceforth (!) take undocumented claims of payment refusal with a grain of salt.
Thanks -

 

[CSRPenFab]

After reading the responses to my original post, it appears that what I thought is true.....Claim denial for stupidity or negligence is covered, except in rare instances. I will show this thread to the friend that I helped properly wire the 240 circuit for and I will henceforth (!) take undocumented claims of payment refusal with a grain of salt.
Thanks -

Good approach! I'll give an example of a homeowner claim I know was not covered. Idiot homeowner decided to build a new deck off his back door. He regraded the whole yard and wound up piling dirt under the low deck so all rainwater would pool and drain back to the house. Rain came, house flooded, not covered.

I was in CA for 50+ years, so Earthquake was always the big concern. The old adage was that when the "big one" hit, you'd know who the insurance guys were on the block because their houses would be the houses that are on fire and burning to the ground. You might not have earthquake insurance, but you sure do have fire insurance! Opps, the gasline broke from the earthquake, causing a leak that result in the total fire loss. Earthquake is not covered, but the peril that destroyed the house was fire!

 

[haveissues]

Very often when there is a thread about doing their own wiring or installing their own chimney someone shows up professing doom and gloom and they are adamant insurance companies will refuse to pay if your house burns down but the same person can never provide an example. Bottom line is you are usually insured against your own stupidity. However, if the insurance company can prove you did something to intentionally create a hazard you will have a problem. I say keep carefully doing your own work to the best of your ability and ignore the nervous types.

 

[brianpgriset]

This thread makes me wonder if insurance covered the guy that ramped his new Ford Raptor. One of the most (in)famous internet videos.

I’d hope that one was one of those rare cases where the claim was denied.

 

[mike93lx]

This thread makes me wonder if insurance covered the guy that ramped his new Ford Raptor. One of the most (in)famous internet videos.

I’d hope that one was one of those rare cases where the claim was denied.

Car insurance often excludes racing or other non-road use cases.

The real stupidity is video taping stuff like that and then positing it

 

[yeldogt]

Stupidity is covered ......

We had one in town where the guy vented his water heater into the attic .... He made sure to get the vent real close to ridge so it would work well.

 

[nadogail]

I am reading that stupidity is covered; Fraud is not.

 

[Showkey]

The other things in play:

1. bad faith by the insurance company can be litiagated. Some insurance companies are well known for slow pay and stalling……they are required to act in good faith.

2. insurance is a numbers game. While fraud is huge problem, claims go up, premiums go up to cover the cost.

A good example of the insured not mitigating damage was Texas and the ” big freeze”. The home owners videoing water leaking from the ceiling and not shutting the water off. They still got all new flooring and complete “home make over“ from insurance.

Electric fire from improper use extension cords vs extension cords damaged from rodents causing a fire. The difference is very difficult to almost impossible to prove after the fact.

 

[LS6 Tommy]

The real stupidity is video taping stuff like that and then positing it

Or believing your truck can actually do the **** they show in the staged TV ads...

Tommy

 

[reader2580]

I know that in commercial insurance the primary insurer will try to find any possible way to get someone else to cover the bill. I visited a local company that one of their main lines of business is determining the cause of fires. A convenience store had a fire so the insurer hired them to help determine the cause of the fire. A glass top ice cream freezer was near the point of origin so the company bought an identical unit to see if the freezer could have caused the fire. If the freezer was at fault the insurer was going to sue the freezer manufacturer to cover the fire damages.

It seems like insurance (and products) might cost less if insurance companies didn't have armies of lawyers trying to recover money from others for insurance claims.

 

[reader2580]

Good approach! I'll give an example of a homeowner claim I know was not covered. Idiot homeowner decided to build a new deck off his back door. He regraded the whole yard and wound up piling dirt under the low deck so all rainwater would pool and drain back to the house. Rain came, house flooded, not covered.

I don't think this claim was denied due to the homeowner causing the issue. Over land flooding is generally not covered by your homeowner's insurance. You need flood insurance to cover this type of flooding.

 

[CSRPenFab]

I don't think this claim was denied due to the homeowner causing the issue. Over land flooding is generally not covered by your homeowner's insurance. You need flood insurance to cover this type of flooding.

Correct.

 

[CSRPenFab]

I know that in commercial insurance the primary insurer will try to find any possible way to get someone else to cover the bill. I visited a local company that one of their main lines of business is determining the cause of fires. A convenience store had a fire so the insurer hired them to help determine the cause of the fire. A glass top ice cream freezer was near the point of origin so the company bought an identical unit to see if the freezer could have caused the fire. If the freezer was at fault the insurer was going to sue the freezer manufacturer to cover the fire damages.

It seems like insurance (and products) might cost less if insurance companies didn't have armies of lawyers trying to recover money from others for insurance claims.

What you are referring to is “subrogation” and it goes on in every line of insurance. Keep in mind it benefits the holder of the policy as well. When an insurer recovers monies from subro, the insured is not penalized for the claim. Insurance would actually cost a lot more of carriers didn’t subrogate where another party was liable for the loss.

 

[PassnThru]

When an insurer recovers monies from subro, the insured is not penalized for the claim.

I wish I could believe that.

 

[CSRPenFab]

I wish I could believe that.

You should. A recovered loss is not a loss. Plain and simple.

 

[Dumber than lumber]

This question is being asked as a 'inquiring mind wants to know' deal, so here goes. If a person does faulty wiring in the house or garage and it burns down AND the wiring is found to be the cause, does the insurance company have the right to refuse payment? I wonder how this would work. How would the insurance company know that the current homeowner was responsible for the wiring and that it was not a pre-existing condition?

I've read on this forum of the insurance company refusing to pay in the case of homeowner error, but I've never seen a documented case of it.

I've never seen a documented case of an instance where a person installed a stereo in his/her car and was refused payment because the wiring shorted out and the car burned, either.

I had this conversation yesterday with a friend while installing a 240V line for his compressor and we're both interested in how this insurance thing works.

Fingerprints?
Online posts?
Home security video?
Interviews of neighbors?
internet search history?
Insurance fraud is no small thing. They probably don't have the resources to go too deep into most claims. But if a death was involved/caused, or property damage was big/extensive enough, the Fire Marshall might start digging.
Kind of interesting question. Guess I better see what the pros here on the forum are saying now that I have composed this.

 

[Doug]

As far as I can see, the 'professional' members of the forum, meaning electricians who do it for a living, are the ones most inclined to make the gloom and doom comments about the refusal for an insurance company to pay due to hacked homeowner wiring.

 

[FredWanaker]

read the policy or call your insurance agent and discuss it. If you have work in your home that is substandard then hire an electrician and fix it. If you are considering substandard work I don't know what to say other than maybe don't play on the freeway or RR tracks. If you are talking hypothetical event, what time do you think the next dog in your neighborhood will bark?

 

[Doug]

Suddenly urination and Tony The Tiger come to mind here.

 

[andersen24]

After 30 years of doing investigations, I can tell you I have never seen a claim denied due to homeowners lack of knowledge or (in)competence. Had one case where a person laid romex exposed on the ground over 300' to power a well. About 30,000 acres later and dozens of homes destroyed, the insurance maxed out the policy and paid out (which on a typical homeowners isn't that much). Civilly and criminally the responsible party was still on the hook though.

 

[loganb]

After 30 years of doing investigations, I can tell you I have never seen a claim denied due to homeowners lack of knowledge or competence. Had one case where a person laid romex exposed on the ground over 300' to power a well. About 30,000 acres later and dozens of homes destroyed, the insurance maxed out the policy and paid out (which on a typical homeowners isn't that much). Civilly and criminally the responsible party was still on the hook though.

ouch....

 

[msharley]

This question is being asked as a 'inquiring mind wants to know' deal, so here goes. If a person does faulty wiring in the house or garage and it burns down AND the wiring is found to be the cause, does the insurance company have the right to refuse payment? I wonder how this would work. How would the insurance company know that the current homeowner was responsible for the wiring and that it was not a pre-existing condition?

I've read on this forum of the insurance company refusing to pay in the case of homeowner error, but I've never seen a documented case of it.

I've never seen a documented case of an instance where a person installed a stereo in his/her car and was refused payment because the wiring shorted out and the car burned, either.

I had this conversation yesterday with a friend while installing a 240V line for his compressor and we're both interested in how this insurance thing works.

Hey Doug,

There are some places that require an "Inspection" by a "Qualified Electrician"....

Hope this helps....

Later, Mark

 

[dcg9381]

A good example of the insured not mitigating damage was Texas and the ” big freeze”. The home owners videoing water leaking from the ceiling and not shutting the water off. They still got all new flooring and complete “home make over“ from insurance.

I'm in on a "homeowner challenge" bet... I'd wager that 50% of home owners do not know how to turn off a water main...

 

[ManUpOrShutUp]

Insurance companies make money by not paying claims, so they will deny a claim any way they can.

Insurance company refuses Long Island fire claim over pet pit bull

 

[tdkkart]

I'm in on a "homeowner challenge" bet... I'd wager that 50% of home owners do not know how to turn off a water main...

Our town was flushing fire hydrants in our neighborhood, neighbor lady called me asking if I had water pressure, she had none or very little.

"Yep, we have water, I'll come check"

No sooner did I open the door than I could hear water running,
"What's that noise?"
" I don't know, never heard it before"
"That noise is water spraying."

Went to the basement found water pouring out from under a closet door, she had no idea where the main shutoff was.
Turns out it was in that closet, BEHIND the water softener which had it's inlet manifold blown apart by the water hammer from the fire hydrant in her front yard being slammed shut.

I only got a bit wet before getting the main water line turned off.

They had just spent many thousands of $$$$ having their basement finished, and now most of it had 2" of water in it.
Not sure how it ever worked out financially and who paid for it.