How Electrical Inspections Reduce Insurance Premiums

Introduction:

Insurance companies depend upon Electrical trade professionals to evaluate your home or facilities  electrical system to ascertain its insurability

With insurance rates on the rise it’s essential you have an electrical building inspection to determine the safety of the electrical system, your liabilities and potential risk of fire.

Why is this Important?

The number one reason for a building assessment is:

  1. Health and safety
  2. Extends Building and Property lifespan
  3. Decreases liability
  4. Reduce Insurance premiums.

1.Health and Safety Building Lifespan

When we consider the replacement cost of a home or facility we need to consider that your property value increases considerably over time and the price you paid for the property when you purchased it can seem miniscule in comparison.

Insurance premiums are adjusted to cover the replacement cost of your home or building at today’s cost so in essence they take all these components into consideration when approving the insurance premium..

If damages do occur, insurance companies must not only understand the building replacement costs but potential loss of life or long term disability components if applicable. Insurance companies take electrical safety very seriously and it can play a significant role in the policy if the building has multiple life safety concerns.

2. Extend Building and Property Lifespan

As with most buildings maintenance is very important and is critical to long term value and enjoyment. When we think of maintenance what comes to mind first is the visible things like paint, windows, siding, roofs etcetera. The unseen items like the electrical system are non-existent until it doesn’t work then everything is affected, outlets,plugs, light fixtures, HVAC, and appliances all stop working.

When you think of your electrical system and how critical it is for day to day life, maintenance makes sense. Regarding ongoing maintenance a Life Safety mindset is important when managing your asset. The majority of most fires are electrically related and can be prevented with regular Maintenance. 

3. Decreased Liability

To reduce both personnel and property liability a facility’s electrical system must be both maintained and within reason kept up to date with local codes and safety requirements. Based upon the electrical code provisions have been made for older properties, however if your property has knob and tube or aluminium wiring it is recommended that repairs be initiated to update or replace antiquated systems.

In some situations the electrical panel is antiquated or no longer manufactured and replacement parts unavailable. With older style screw in fuse panels we recommend replacement as soon as possible, as they are known to overheat and cause fires.

Under Sized Equipment:

During our inspections we look for undersized systems such as a 60 amp electrical panel. At one time this panel size actually was sufficient to handle a household needs although in today’s world of multiple electrical appliances like AC, automation,  car chargers a 100 amp panel has become undersized. To meet today’s home electrical needs we recommend that a 200 amp breaker panel be installed.

Smoke Alarms

Did you know that smoke alarms have a shelf life of 10 years? There is a life cycle date printed on the smoke detector and if it is beyond the approved date the alarm must be replaced. 

4. Reduce Insurance premiums.

Have you ever asked the question, Why should I pay the same Insurance premium rates as someone who does not maintain  their property adequately?

It can be compared to a person paying the same insurance rate to someone who drives 100,000 thousand kilometres a year versus someone who drives only 6K. Doesn’t make sense, does it?

It seems to go this way in the world of insurance, one price fits all.

Can we alter this reality?

Completing a building inspection by a qualified, approved electrical company can qualify your facility insurable and even reduce premiums. To further clarify, once an electrical inspection is completed there may be deficiencies found during the inspection that need to be corrected and once the deficiencies are corrected your home or building gets a clean bill of health from our Electrical professional, your insurance approval is ready to go.

What is a Certified Electrical Risk Assessment?

A certified electrical risk assessment should be completed by a certified and approved Electrical company. A master electrician is required to perform the inspection and the company must be approved by the insurance company.

Certified Electrical Risk Assessment Includes:

  • Complete and document a 125 point inspection.
  • Every assessments must be completed by a certified BC Master Electricians
  • Photos are catalogued of all extreme risk items.
  • Document and provide a complete list of action items that require remedy.
  • Make corrective recommendations that will reduce risk and premiums.
  • Provide Thermographic images of all accessible Electrical Panels.

 

What to expect:

An Electrical Inspection Report is based upon 5 criteria,

  1. Age of the Home
    1. Pre-1950 1950-59 1960-69           
    2. 1970-79 1980-89 1990-99
    3. 2000- present
  2. Low RIsk
    1. Additional safety features have been added to improve the safety of the home, to be comparable in safety to that of a home built in 2001.    Notes: (i) See Appendix A for full description of risk ratings
    2. (ii) See appendix B for Client Agreement, presenting limitations of this report.
  1. Medium RIsk
    1. House electrical system appears in satisfactory condition, as it complies with the electrical code that was applicable at the time of installation.
  2. High RIsk
    1. Electrical fire hazards identified. Must be repaired ASAP. We recommend repairs be carried out within 30 days
  3. Extreme Risk
    1. Serious electrical concerns requiring immediate attention

Additional Inspection Steps:

  • Thermographic images of all electrical panels
  • Electrical technicians will open and inspect several devices throughout the property to verify conditions and correct terminations.
  • Electrical technicians will inspect light fixtures and switching, connection points, overhead electrical service wires, cable protections, panels and subpanels.
  • Inspect Breakers.
  • Inspect all Smoke alarm devices.
  • The list of inspection points is extensive to ensure the key components are covered and the building is safe.
  • Provides an electrical report complete with room by room detail, pictures and level of risk.
  • Provide a Budget to complete electrical deficiencies as required.

What are the normal costs associated with inspections?

The average cost for a 2000 square foot home is $495.00 plus and additional $55 dollars for each additional sub panel.

A sub-panel is defined as an additional electrical distribution panel which is connected to the main panel that supports additional load. A sub panel can be located beside the main panel, in the garage or other locations within the building.

Potential Costs of Reducing Your Risk Ratings?

After the inspection is completed a report is provided that clarifies the status of your property that clearly identifies whether the property is a Low, Medium, High or Extreme Risk building.

As part of the inspection package we provide a check list of low – high risk deficiencies that require remedy as well as recommendations for changes that are code related but not critical to life safety.

The cost for deficiencies can range from very low to high depending upon the age of the facility and maintenance repairs or upgrades completed over the years.

PTX ELectric will provide the customer with a budget for this work and if approved complete the work on a cost plus basis. (Time and material basis). The budgets we provide are very accurate, however buried or unseen items can arise and increase the cost. When PTX Electric performs the required work we document and manage the labour hours and in most cases complete the tasks quicker reducing costs.

Benefits

Insurance companies favour Electrical Inspection Reports as they identify risk and potentially reduce insurance premiums.

When insurance companies can clarify risk concerning fire and life safety concerns, premiums can be lowered. Once repairs are rectified and concerns mitigated, lower insurance rates will follow.

Life Safety

Generally speaking Life Safety comes first,  like they say sprinklers save buildings smoke alarms save lives. Smoke Detectors, CO2 Carbon Dioxide and CO Carbon Monoxide detectors have come a long way since first introduced in the 70’s.

Some of the cool features they have is Voice, Multi linguistic, Light Strobe for the deaf. Some units have wifi and bluetooth capabilities that allow you to connect all devices with minimal wiring costs.

Upgrading life safety components are important regardless of the cost.

There is a wide selection of products so let PTX ELectric provide you with the best solution for your home office or facility.

Conclusion

PTX Electric is very excited to provide you with our new Electrical Insurance Inspection offering. As briefly described in the blog these electrical inspections are geared to provide both residential and commercial customers.with the peace and mind of a safe environment. The added features of this process is to obtain Insurance for your building, and reduce insurance premiums through proactive Maintenance and Code compliance.