Insurance/Remodeling/Knob and tube issues in Virginia

[1924fixer]

Hello group,

I could use advice and/or words of encouragement. We're buying a

1920's brick house in Virginia that is in GREAT shape, aside from desperately needing new wiring to replace its old knob and tube and having an old oil-burning furnace that we plan to replace with a gas one. (The purchase price reflects the need to do both of these things, btw.)

Here's my problem. We obviously can't close on the house without having insurance. And we won't replace the K&T until after we close on the house, of course. But every insurance agent I've talked to so far won't insure it until the wiring is replaced. See my paradox here? (Note: it isn't that they won't insure it at a _reasonable_ price - they won't insure it at ANY price.)

VPIA is supposed to be around for these sorts of cases, and they're not too badly priced. However, the agent who told me about VPIA (none of the others could be bothered) says that since we're remodeling, we can't do VPIA until we're done remodeling. Um. Ok, so how exactly do we fix the wiring, then?

While I'm on the topic, at least some insurance agents have told me that they won't write the policy if we do some of the work ourselves instead of using a licensed contractor. Which seems to contradict what I'm reading from the building permit office, which says that a homeowner can get a permit and do anything on their own home, with the usual requirements for inspections, etc. Any suggestions from folks who have remodeled on who to use for a house with entirely up to code and permitted work that happens to have been legally done by the homeowner?

Many thanks!

[Speedy Jim]

See if this link works on your browser:

And GOOGLE this: Jim

[wayne]

I guess the obvious question is "is the house insured now?" If so contact that company since they do not have a problem with the current house or wiring!

Wayne

[Jeff Cochran]

So have the seller replace it and up your purchase price to match.

FWIW, I've had both Allstate and Nationwide insure me in a knob and tube environment. Have you treid just calling one and telling them you're buying the place and need insurance, withoiut specifying anything?

Jeff

[John Gilmer]

Exactly!

I have yet to have an insurance express any curiosity over anything other that LOCATION, distance from fire hydrant, and size and replacement cost.

I suspect troll behavior. Why would he approach an insurance agent with a red flag telling him he thinks the house has dangerous wiring but he wants insurance.

[DaveG]

Shop around with several insurance companies. Sadly, the P&C industry has been pummeled in the last decade with a bad streak of claims expenses. Now in many cases, companies may try limiting their exposure in a certain region by being extremely picky on what they insure, especially with new customers. Keep trying, and if you get nowhere, try calling your state department of insurance. Someone, somewhere should insure your house. I've done extensive work on my house, adding a deck, finishing a basement, installing a hot tub, all of which required permits and inspections, which I passed. No problems with our homeowners insurance. Other than the premium rates getting a little up there.

[Speedy Jim]

In this case it's not trolling, although it sounds suspicious on the surface.

K & T has become a *big* insurability issue in both US and Canada. Personally, I think the insurers are making too big a flap over it, but read the articles on these sites:

Jim

[Childfree Scott]

You can always go uninsured until you get the wiring redone.

Of when they ask why kind of wiring you have lie or say that you don't know and fix it ASAP.

Don't ever admit to doing it yourself, say you bought the house that way.

I hope this helps.

[default]

Your lending institution can almost certainly find you someone who can sell you enough insurance to cover THEM, and that's all you need in order to close. The real estate agent(s) involved may also have useful suggestions.

The casualty/homeowner's insurance isn't necessary, it's just a really good idea, and you might be able to get liability without the casualty. If you don't have any children or other dependants other than a mate who's in reasonable (employable) condition, you COULD just be really careful not to burn the house down until you get the K&T disconnected.

--Goedjn

[Steve the Sauropodman]

Same here. We purchased our house 5 years ago. It was built in 1974, back when aluminum wire was code. Our inspector informed us that aluminum was a no longer used. We applied for insurance - they never asked; we didn't tell; renovated the place with nice, new copper..done deal. Smells like troll to me, too.

[Cate]

"DaveG" wrote in news:ieHqc.79401$xw3.4391349@attbi_s04:

Hear, hear. We recently bought a house on a street full of cedar-sided houses built in the 20s. Our homeowner's company canceled our policy after giving us a binder and then sending out an inspector who proclaimed the entire house needed to be reshingled. (But we had the policy for the closing.) We had trouble getting a new policy, but finally found someone who would insure us if we replaced some of the shingles, not all.

This is despite the fact that the shingled houses around us are in similar condition. All the companies and agents I talked to cited increased claims since 9/11 and since Hurricane Isabel last year as the reason for the extreme pickiness, and since we're the first to buy in the neighborhood since the hurricane, we got to pay the price.

Cate

[CAStinneford]

Not looking for trouble from you but how and where on the deed would you be able to tell the age of the dwelling on the property?

[I-zheet M'drurz]

Ohhh, OK, so I left out a couple of steps. This is 21st century America, property tax databases are available for use by the insurance companies. Back to the deed, to link it up, you'll usually find a basic description of the dwelling in place, and a designation by house and street number and/or block and lot reference, both of which link right back to municipal tax information. ("...being block 14, lots 6 and 7 in the Donald Trump Plan of lots, having erected thereon a 2 1/2 story frame and brick dwelling known as 21 Elm street...")

The point of it is that no insurance company is going to cover an owner-occupied home without knowing some basic information. The idea that you can walk in and buy an insurance policy without them knowing anything about the dwelling is ludicrous.

The bigger point is that if you lie and get caught you go to jail and go bankrupt from that unpaid mortgage on your suddenly uninsured house.

[Jeff Cochran]

They've always asked type of construction, square footage, land value, purchase price, number of floors and whether or not I had alarms or fire extingushers. They've never asked about wiring, plumbing, or anything else.

Jeff

[Jeff Cochran]

Won't get a mortgage then. :)

Jeff

[1924fixer]

Actually, on this house, they're asking about a LOT of stuff, beyond what I got asked when I insured the 1979 house we just sold. Apparently 1924 raises all sorts of flags. I'm at the point where I just start out by saying we have knob and tube, after I spent almost half an hour on the phone with two of the first places I called, only to have them decline to write a policy _after_ they asked about K&T. That's after they took down the names, ages, genders, neuter status, breed mixes, etc of all three dogs, among other things. Took forever, only to get told 'no'. Since we're closing in just over 2 weeks, I don't have a whole lot of time to burn, making me pretty averse to trying to see if some insurer will forget to ask for long enough to get the sale closed.

The folks who suggest I lie to the insurance company are probably right - I could lie to them and probably for long enough to get the house closed. However, it's clearly documented in the inspection report that there's K&T, so in the event that I _did_ need the policy, I'd be up a creek. Insurance fraud isn't my cup of tea, thanks. :)

It sounds like things have recently changed with K&T. AllState is no longer insuring K&T (they were as recently as 2 years ago), nor is the insurance company that presently covers the house. Nor my present insurance company, despite years with not a single claim in the house we just sold. I'll check the other companies suggested.

At this point, I've found one company (small local broker) willing to write a policy which would give me 60 days to replace the wiring after closing. That may be rushing it, depending on how many holes we have to make in the walls, but it's doable at least.

So knob & tube is at least temporarily insurable in VA, but for anything long term, I'd have to look at VPIA (which is Virginia's version of FAIR). I was I think incorrect when I posted yesterday that I couldn't insure the house through VPIA - they just won't do replacement cost while the house is being remodeled.

[Joe Doe]

State Farm wanted me to certify, many things were updated here in Austin TX. (Electric panel, HVAC....)

I guess older neighbourhoods/houses may trigger more scrutiny.

Roland

[William Brown]

Homeowner's insurance is a changed market now. Following a few storms, and the soured economy (that reduced the insurance companies investment income), and claims for mold, which had not been a problem until recently so was not adequately underwritten, they realized that they were losing a ton of money on homeowner's insurance. Their universal response has been to make it much harder to get, and sometimes renew insurance. I've never had to provide detailed information on our home, but we have had our policy for many years, with no recent claims. Right now I would be reluctant to make a claim, short of major destruction of the house, lest I trigger the renewal review process.

In your situation, I think your best option is to get a firm price on replacing the wiring, then talk to the seller about reaching an accommodation. Perhaps you can increase your offer by a percentage of the wiring replacement cost, and the seller can have the replacement done before closing. Perhaps the seller would even be willing to bear the entire cost himself, if the old wiring is a deal breaker; after all, anyone other than a cash purchaser will face the same insurance problem you are facing.

1924fixer wrote: