Does Home Insurance Cover Electrical Panel Replacement?

If a covered event damages your home’s electric panel, your homeowners insurance might pay to repair or replace it.

John Egan
Written byJohn Egan
John Egan
John Egan
  • 20+ years in insurance and personal finance content creation

  • Contributor to top brands like USA Today

John specializes in insurance, personal finance, real estate, and health and wellness. In 2022, he authored a guide on content marketing for beginners.

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Ashley Cox
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Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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Updated November 8, 2024

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The electrical panel, also known as a breaker box, controls the power that runs your appliances, electronic devices, and anything else in your home that relies on electricity. The electrical panel holds circuit breakers, which are typically contained in a metal box. Circuit breakers protect your home from the damage that an overload or short circuit can cause.[1]

Your home’s electrical panel generally lasts 20 to 40 years. But you may need to replace the electrical panel sooner than that if a catastrophe damages it. Your homeowners insurance might pay for a new electrical panel, depending on the cause of the damage and your coverage.

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When homeowners insurance will cover electrical panel replacement

The part of your homeowners insurance policy that covers your home’s structure (and not the belongings inside) may cover the replacement of your electrical panel. This coverage, known as dwelling coverage, normally kicks in if there’s been a “sudden and accidental” loss that a covered event causes, such as a fire or a lightning strike.

Commonly covered home insurance perils

Most home insurance policies cover some common events that can damage your home and belongings, called “perils.” Here are the most commonly covered perils for home insurance policies:

When homeowners insurance won’t cover electrical panel replacement

In some situations, a homeowners insurance policy might not cover an electrical panel replacement.

For instance, an insurer may reject your claim if the panel is old or you haven’t properly maintained it.

In addition, the insurer might not pay for a new electrical panel if your home has knob-and-tube wiring or aluminum wiring. An insurer might even refuse to cover your home at all if these types of wiring are present, or at the very least might charge more for coverage.

Knob-and-tube wiring was common in homes and other buildings in North America from roughly the 1880s to the 1940s. This type of wiring is now obsolete and could be a safety hazard.[2]

Insurers also consider aluminum wiring in homes a hazard. In some homes, electricians substituted aluminum wiring for copper wiring from about 1965 to 1973. The main problem with aluminum wiring is that it deteriorates faster than copper wiring does, creating a possible fire hazard.[3]

Important Information

Homes built before 1972 and wired with aluminum were 55 times more likely to have electrical outlets with fire hazards than homes wired with copper, according to the U.S. Consumer Product Safety Commission.[4]

How do you know your electrical panel needs replacement?

A number of things may signal the need to replace your electrical panel, including:[5]

  • Your home is old. If your home is old (generally at least 40 years old) and the electrical panel is original to the home, it may be worn out and need replacement.

  • You can see rust and corrosion. If you spot rust or corrosion on circuit breakers, cables, wires, and other components, contact an electrician as soon as possible.

  • The panel smells. Overheating inside the electrical panel may cause an odor, like the kind you notice when there’s a fire.

  • Your electric bills increase. This may be happening because malfunctioning wires are sending more power to appliances and other items that use electricity.

  • Your circuit breakers are tripping. If you’re regularly resetting the breakers after they’ve tripped, it might be time for a new electrical panel. A breaker trips when the panel detects an electrical issue and automatically shuts off the breaker to prevent the circuit from overheating.

  • Your lights dim frequently. Dimming lights could be a sign that something’s wrong with the electrical panel.

  • You hear strange noises. Loose wiring may create crackling, popping, or sizzling sounds.

Does your home warranty cover electrical systems?

A home warranty generally covers problems with electrical systems arising from regular wear and tear. This includes coverage of components like the electrical panel, circuit breakers, and electric wiring.

But a home warranty usually doesn’t cover issues related to power surges, power failures, lightning strikes, circuit overloads, and similar incidents.

Home Warranty vs. Home Insurance: How Do They Differ?

Home Warranty vs. Home Insurance: How Do They Differ?

What is the average cost to replace an electrical panel?

The average cost to replace an electrical panel ranges anywhere from $520 to more than $2,135, according to home services website Angi.[6] 

Many factors affect the cost of a new electrical panel, including the type of panel, whether it’ll need to be relocated, permitting costs, and local labor costs in your area.

Tips for preventing electrical system issues

Making sure your electrical panel is up to date ensures that your home is safe and can even reduce the likelihood of you filing a home insurance claim. Here are some things you can do to prevent electrical system issues:

  • Bring your electrical system up to code. Keeping your electrical system up to code generally means making sure it complies with the National Fire Protection Association’s National Electrical Code. You may also consider including state and local electrical codes when updating your electrical system. An electrician may do several things to bring your system up to code, such as replacing hazardous wiring, installing new electrical outlets and switches, and installing modern lighting, such as LED lights.

  • Address issues with the electrical panel that need to be fixed but don’t necessarily call for replacing the panel. This may include hiring a professional to disconnect wires and terminals, clean the panel’s components, and freshen up the electrical connections.

  • Have an electrician inspect your system each year. Having a qualified electrician inspect your system each year can help you identify and fix electrical issues before they do major damage to your home.

  • Add a whole-house surge protector. This is designed to protect appliances and electronics from damage when a power surge occurs. Make sure not to overload electrical outlets, and plug major appliances directly into electrical outlets rather than into power strips or extension cords.

  • Switch to energy-saving appliances and devices. These will put less strain on your electrical system.

  • Install ground-fault circuit interrupters. These circuit breakers turn off electricity when a ground fault occurs. A ground fault is an unplanned, potentially dangerous electrical path between a power source and a grounded surface.[7]

Other ways to minimize the risk of electrical issues or fire include using the correct wattage for lamps and light fixtures, unplugging appliances when not in use, replacing electrical and extension cords when they’re damaged, and storing combustible items away from furnaces and space heaters.

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Benefits of an up-to-date electrical system

Having an up-to-date electrical system in your home has many benefits, including:

  • Cuts down on the risk of an electrical fire; faulty electrical systems are among the leading causes of house fires

  • Ensures your electrical system meets current electrical codes

  • Enables appliances and other electricity-dependent items to run more efficiently

  • Makes it cheaper to insure your home

  • Reduces the likelihood of filing an electricity-related insurance claim

  • Potentially boosts the resale value of your home

Electrical panel replacement FAQs

Keeping your home’s electrical systems in good repair can make your home safer and help you avoid costly home insurance claims for electrical panel damage. Check out this additional information about electrical panels, how they work, and when you should consider replacing one.

  • What electrical problems does homeowners insurance cover?

    A standard home insurance policy typically covers electrical problems caused by a “sudden and accidental” loss, such as a fire or lightning strike.

    Your insurer may also pay for an upgrade of your home’s electrical system if it was damaged in an incident your policy covers. But you typically need to pay for a normal upgrade on your own. An electrical upgrade may let you score a home insurance discount, depending on the insurer.

  • How much does it cost to replace an electrical panel?

    It costs anywhere from $520 to $2,135 to replace an electrical panel, according to home services website Angi. The type of panel you’re replacing, permitting fees, and local labor costs all factor into how much you’ll pay for an electrical panel replacement.

  • Do you need an electrician to upgrade an electrical panel?

    Yes. Upgrading or replacing your electrical panel involves working with your home’s electrical supply, in addition to adherence to local codes. It’s important to let a qualified electrician handle this type of work to ensure safety and that your new panel is up to code.

  • How much does it cost to upgrade an electrical panel from 100 to 200 amps?

    It can cost anywhere from $1,300 to $3,000 to upgrade an electrical panel from 100 to 200 amps. Factors like the size of your home, age of the electrical system you’re upgrading, and the complexity of the installation process will affect your total cost.

  • What is involved in replacing an electrical panel?

    The exact process of replacing an electrical panel may vary depending on the scope of your project. But in general, an electrician will contact your utility provider to cut off electricity to your home, disconnect all circuits from the existing panel, and remove it from the wall. Then, they’ll hang the new electrical panel on the wall and reattach the wires to each circuit breaker.

Sources

  1. Eaton. "What is a circuit breaker."
  2. International Association of Certified Home Inspectors. "Knob-and-Tube Wiring."
  3. International Association of Certified Home Inspectors. "Inspecting Aluminum Wiring."
  4. U.S. Consumer Product Safety Commission. "Repairing Aluminum Wiring."
  5. Milton Electric Company. "Understanding Electrical Panels: 7 Signs To Replace Your Electric Panel."
  6. Angi. "How Much Does It Cost to Replace an Electrical Panel?."
  7. Occupational Safety and Health Administration. "Ground-Fault Circuit Interrupters (GFCI)."
John Egan
John Egan

John Egan is a freelance writer and content marketing strategist in Austin, Texas. His specialties include personal finance, real estate, and health and wellness. John’s work has been published by outlets such as CreditCard.com, Bankrate, Forbes Advisor, Experian, Capital One, The Balance and U.S. News & World Report. He is the author of The Stripped-Down Guide to Content Marketing.

Ashley Cox
Edited byAshley CoxSenior Managing Editor
Headshot of Managing Editor Ashley Cox
Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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