Buying an Old House? This One Little Thing Could Make It Hard to Get Homeowners Insurance

My wife and I recently bought a 101-year-old house -- and we love it! We love the character, the big windows, the hardwood floors, the funny little architectural details, and the interesting door knobs and fixtures. We love everything that makes this house feel like stepping into another era of history, that makes us feel connected to the unique heritage of our neighborhood, and to the lives of all the families that have gone before.

But there's one thing about buying an old house that we don't love: knob and tube wiring.

Like so many other aspects of homeownership, I had never heard of "knob and tube wiring" before it became a weird, expensive problem in my life. But if you buy an old house that was built between 1880 and 1940, your house might have knob and tube wiring. And this old style of wiring can cause you thousands of dollars' worth of headaches.

Let's look at a few reasons why knob and tube wiring is a problem for homeowners insurance, and how you can solve it.

What is knob and tube wiring?

Electrical wiring technology has come a long way since 1880-1940. But back in those days, many homes were electrified with a style of wiring called "knob and tube wiring," that uses porcelain knobs and tubes. This kind of wiring is now considered obsolete, and depending on how it was installed or modified over the years, or what kind of condition the wiring's insulation is in, it can be a safety hazard.

Knob and tube wiring can't be installed anymore, and the modern form of electrical wiring (called "romex") is safer and better. But if you buy an older house, you might find yourself stuck with a knob and tube wiring problem that can keep you from getting homeowners insurance.

Homeowners insurance: Problems with knob and tube wiring

Some homeowners insurance companies will not insure homes that have knob and tube wiring. Other companies will offer insurance coverage for homes with knob and tube wiring, but at a higher premium. Want to replace the knob and tube wiring? It could cost thousands of dollars. According to homeinspectorsecrets.com, the average cost to replace knob and tube wiring ranges from $3,500 to $9,000.

But this doesn't mean that knob and tube wiring has to be a dealbreaker. After all, many older homes from the pre-World War II era still have this kind of wiring. Knob and tube wiring is not always hazardous and does not always have to be replaced. With careful planning and expert advice, you can navigate the hassles of knob and tube.

How to get homeowners insurance with knob and tube wiring

When we were house hunting, our real estate agent knew that we loved older homes, and he knew that our desired neighborhood had a lot of houses from the era of knob and tube wiring. He recommended some homeowners insurance companies in our state that offered coverage for knob and tube wiring, and we were able to get a policy.

Fortunately, the same insurance company that already insured our cars was also willing to insure our new (old) knob and tube wired house. The premium was affordable, especially because we got an insurance discount for bundling home and auto coverage.

There was just one more thing that our insurance company needed so we could buy the house: it required a professional electrician to inspect the knob and tube wiring. We contacted a local electrical contractor and paid a few hundred dollars for one of their licensed electricians to spend a few hours checking out the nooks and crannies of our old house's wiring.

The electrician's report came back, and it was good news! The knob and tube wiring was in excellent condition and was limited to a few areas of the house; most of the high-demand places in our house like appliances and air conditioning were on newer wiring that had been replaced by previous homeowners. He did not recommend any further replacement of the knob and tube wiring; we were good to go, our home's wiring was safe, we didn't have to spend thousands of dollars rewiring the whole house, and our homeowners insurance got approved.

Bottom line: If you buy an old house, you might run into problems with knob and tube wiring. Some homeowners insurance companies won't offer insurance for homes with this kind of wiring. But you don't have to spend thousands of dollars to rewire the house -- your insurer may just require a specialized inspection by an electrician. Knob and tube wiring doesn't have to be a dealbreaker for your dream home.