Won't insure with Active cloth wiring?

Question

Hey everyone, just curious if anyone has run into this before,

Currently have a property under contract in Broward County, Florida, and once the 4 point was sent to the insurance company they said they do not have anyone that covers active cloth wiring. Is this common?

I currently have someone else working on a binder to see if  they'll cover it, but just wanted to see what others have dealt with in this topic.. the small research that I've done on cloth wiring has shown that it doesn't seem to be any real hazard or even necessary to replace unless if there are apparent issues with the wiring.

Pat L. · Answer

We had the same issue on a flip, cloth wiring with no ground so it ALL had to be completely replaced as per Electrical Inspector & before signing off the permits.

Jerry Feldt · Answer

I just lost a sale supposedly due to the insurance company not covering what the electrician wrote up as Synthetic Rayon in braided jacket with thermoplastic insulation. My research and others have told me it was PVC Romex. We had one wire that was cloth covered with aluminum that we had switched out. But we were told the insurance company would not cover the Rayon Braided lines. This also came to light after we just upgraded the entire Circuit Breaker Box. I am trying to get ahold of the insurance company to get more details on this but if the insurance companies are going this far I can see about 60% of Central Florida homes not selling due to $15K to $30K worth of additional wiring just to sell.

You think its hard to find affordable housing now, just wait and see.

Jacob Passmore · Answer

@Joshua Pavao

Is that a Federal Pacific "stab-lok" breaker by chance?

I've just recently ran into a situation where an insurance company did an inspection and found  my client to have a Federal Pacific Stab lok and they chose to come off risk. I can't tell from the pics, but it looks like one, and if it is then it's likely the reason why. There are companies that will still insure them.

Roy N. · Answer

@Joshua Pavao

That is a new one to me.  We have encountered companies which will not underwrite knob-and-tube or aluminium wiring {which can be perfectly safe}, but never one that refused paper/fabric-covered wiring.

What does your insurer classify as "fabric/cloth covered wiring" {I cannot really see the pictures closely enough).   Is it just ungrounded wiring with cloth insulators on the individual hot and neutral wires (like was found with Knob-and-tube and was still used until the mid-1950s)?   Or does it include wiring with an external tar impregnated cloth jacket as was used well into the 1960s: this wiring frequently has plastic insulators on the individual wires (which can become brittle) and/or paper sheathing within the outer jacket.