Bay Area homeowners could get coverage denied or canceled for having outdated electrical system
SAN FRANCISCO (KGO) -- Few of you have probably heard of knob and tube electrical wiring. But, it turns out you should know more, because insurance companies are now canceling and denying homeowners policies for having this old electrical system.
Inside many old homes in the Bay Area is an outdated electrical system, called knob and tube.
Here's the electrical-for-dummies explanation by electrician John Peters and San Francisco developer Matt Ticknor, president of Knob and Tube Replacement.
Knob is a porcelain knob you drive into wood. The knob has a nail right in the middle, the nail goes into a wood stud.
Then there's a porcelain tube - the conductor runs through the tube and then the portion of the tube would go right through a wood stud, and you string like a clothes line between knob to knob to knob.
The ceramic acts as insulation. Ticknor explained that the wires that carry the electricity also have a special coating which is old and in many cases, degrading.
"I'm going to rub my fingers right over this, you can see my hand. It's falling apart. Insurance companies hate it," said Ticknor.
VIDEO: 'My neighbor's toilet?': Bizarre list of reasons why insurance companies dropped CA homeowners
Jerry Becerra is a an insurance broker. "If we put it on the application, we are going to get declined," revealed Becerra, who works for Heffernan Barbary Insurance Services.
Until recently, it hadn't been an issue for real estate agents like Brandi Mayo because most homes in San Francisco - built before 1950, a few as late as 1960 - used knob and tube wiring.
"It wasn't something that was a deal breaker for buying property. It was like, OK there's knob and tube, but now it's become an insurance issue," said Mayo.
And without insurance, the lender will not approve the mortgage, unless the buyer pays for the expensive California FAIR plan.
Current homeowners are also being warned about the possible implications of having knob and tube wiring.
"I tell people it's best to be proactive. If you've got knob and tube in your building, don't wait until you get canceled," insisted Becerra.
Ticknor now focuses his business on replacing knob and tube electrical wiring. It's not hard to identify knob and tube in old homes.
MORE: 'It's a disaster': Here are top 10 Bay Area neighborhoods with the highest non-renewal rates
"Looking at a wall sconce and you can see that there are two wires, there's a hot wire and a neutral wire," he pointed out.
Because knob and tube is not grounded, there is no third wire unlike what is used today -- typically Romex.
"The copper one in Romex is the ground wire. The ground wire is what's missing in a knob and tube electrical system," added Ticknor.
Another clue are the outlets. Knob and tube wiring has two prongs outlets, not three.
In some knob and tube homes, people have installed three prongs, which can be dangerous if there is a electrical surge potentially damaging your equipment.
"That's what the ground wire does, it absorbs the electrical chock and brings it to the ground. This is not a grounded system even though it has a three prong outlet," said Ticknor.
John Peters, a long-time electrician, still believes knob and tube wiring is safe.
VIDEO: 'Mold, algae': Insurer drops SF homeowners, citing aerial footage of roof that didn't exist
"I have it in my house, I'm going to keep it there, I hope, forever," insisted Peters.
But the insurance companies now see it as a potential fire risk, even though there hasn't been a single case of a house fire in San Francisco caused by knob and tub wiring.
Here's what the Fire Department told us:
"The department has not seen trends in knob and tube electrical wiring residential structure fires according to our Fire department investigators."
Regardless, insurance companies insist that those who do nothing face a certain outcome.
"They're going to get canceled or declined," warned Becerra.
