UNDERWRITING RESIDENTIAL PROPERTY
This article discusses three items that should be considered when writing residential insurance policies.
In the 1970's, aluminum wiring came into service and was installed in many residential installations. Over time some concern developed with aluminum wiring and its serviceability.
Aluminum wiring develops an electrically resistant layer of oxide when exposed to oxygen. This layer can cause increased electrical resistance at connections in the circuit. As a result of the oxide build-up on the aluminum wiring, it is critical that the connections in the circuit are made correctly. Over heating of the connection and resulting deterioration can occur if it is not made correctly. Receptacles and switches have been designed specifically for aluminum wiring to help minimize the potential for overheating at the connections.
In underwriting residential insurance policies on residential properties with aluminum wiring, it is very difficult to determine whether or not the aluminum wiring in this system has been properly connected and will provide acceptable service. We recommend that determining the history of the installation specifically whether or not previous electrical fires have occurred in the property and were these problems related to the aluminum wiring system.
The difficulty in assessing the potential for loss with a fireplace installation is that it is not possible to see through the wall construction and determine whether or not the fireplace chimney or flue liner is installed correctly.
We have examined fires that have occurred with zero clearance fireplaces that were in service for ten to twelve years without consequence. Our examinations however, determined very obvious installation deficiencies that did not comply to the manufacturers or building code installation requirements. In these cases the installation deficiency could have been determined.
In another case however, involving a fireplace insert and a masonry chimney, there was no obvious evidence that the chimney was defective and that combustible materials were placed indirect contact with the chimney flue pipe. The only possible indication of potential problems with this twelve year old installation was that there had been four previous fires on the same street and all of the houses were constructed by the same builder.
Flat roofs are very common in Canada and for the most part provide very effective service. However, flat roofs on residential properties can cause several problems.
The main area of concern with respect to residential properties and flat roofs is the lack of ventilation of the roof space i.e. the space between the finished ceiling and the exposed roof surface.
We recently inspected a roof collapse that had occurred two days after the insurance coverage was obtained. The collapse occurred in a townhouse complex with flat roofs and was the result of wood rot and deterioration inside the roof structure. The rot and deterioration was a direct result of inadequate ventilation and poor maintenance of the roof system. Condensation will build up in the roof and promote rot and deterioration of the wood if adequate ventilation is not provided. A partial collapse of the roof occurred during a rain storm and caused twenty five thousand dollars in water damage to the townhouse contents.
Our examination of the site also determined evidence of numerous repairs to the roof as well as concerns for roof deterioration in other areas of the property. These items would have been visible prior to the collapse occurring.
We were also involved in litigation concerning a similar deteriorated roof collapse and resulting water damage claim that occurred shortly after the new owner took possession of the property. The cause of this problem again was inadequate roof ventilation that resulted in rot and deterioration of the wood roof structure.
Examination of this roof indicated evidence of numerous roof repairs that were obvious prior to the collapse and would have provided some indication and concern for the condition of the roof structure.
The above items have been provided to illustrate some of the potential problems with underwriting residential property. It seems that the probability of determining potential risk for some of these items could have been prevented with a detailed review of background information concerning the property. Also, in many instances a site examination by a qualified engineer/inspector would determine the severity of the potential risk.
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Walters Forensic Engineering | 277 Wellington
Street West, Suite 800 | Toronto, ON M5V 3H2