Electrical fires in older homes are up, mostly in the eastern U.S.
Thirty percent of electrical fires are caused by faulty appliances and electronics.
With high mortgage rates and fewer buying options making homeownership nearly 37% more expensive than renting, many buyers are choosing older properties to cut costs.
PropertyCasualty360.com recently spoke to Bob Marshall, co-founder and CEO of Whisker Labs, about the increase in electrical fires in aging housing stock around the U.S.
Marshall founded Whisker Labs to create Ting, a sensor and service that helps detect and prevent electrical hazards before they can start a fire. The company is partnered with over a dozen U.S. insurance providers seeking to better protect their customers and mitigate fire-related losses.
PropertyCasualty360: Why are electrical fires in older homes on the rise?
Marshall: To begin with, electrical fires are often the most damaging and catastrophic type of fire, and unlike most fire risks, they’re actually increasing over time. The U.S. Fire Administration recently released data stating that between 2013 and 2022, electrical fires increased by 6%.
In contrast, fires from cooking, heating and open flames actually went down. This means that all homes – whether new or old – are susceptible to electrical fires; however, older homes tend to be at higher risk due to a variety of factors.
Many fire hazards that occur are age related. While wiring can be installed incorrectly regardless of age, we frequently see fire hazards – like loose connections, frayed wires or exposed connections – worsen over time. This compounds with another issue: the longer a wiring fault is allowed to sit, the likelier it is to start a fire.
Take, for example, an arcing electrical outlet – while it’s unlikely that this would start an immediate fire, if it continues for an extended period, the fault will worsen to the point that a fire could start.
It’s important to consider that electric utility grid aging also plays into fire risks. Many states have grid infrastructure that has been around for a long time, with little maintenance done, so power quality voltage problems may have been bubbling under the surface or on the pole for a long time.
PropertyCasualty360: What’s causing the electrical fires?
Marshall: The sources of electrical fires vary widely, and until recently, very little was known about what causes them, and why they’re so devastating. We at Whisker Labs have detected and mitigated over 13,000 fire hazards in homes, and during this have collected an immense amount of data as to why they happen, and how they can be prevented.
There are three main causes of electrical fires in homes: a home’s electrical infrastructure, connected devices and appliances, and the power provided to the home by a utility provider. Interestingly, we’ve determined that roughly only 40% of fire hazards are related to the electrical infrastructure of the home – things like wiring, switches and breakers that are often installed improperly, or left unmaintained over long periods of time.
Yet, people assume that this is where most of the issues come from. We’ve also discovered that around 30% of electrical fires are caused by faulty appliances and electronics connected to the home electrical system. These hazards can be extremely damaging, and difficult to anticipate. Typical bad actors are heat blankets and pads, holiday lights, space heaters, power strips, and laptop and phone power supplies. Since appliances are replaced regularly, these hazards rarely skew towards older homes.
Finally, we’ve seen that 30% of all fire hazards stem from the utility provider – these risks happen at the point of transmission between the utility connection and the home. This is particularly alarming, as we estimate that about one million homes in the U.S. have dangerous power coming from the utility.
When considering utility-related hazards, it’s crucial to also address the catastrophic risk of wildfires. Power line faults or surges, especially in areas prone to wildfires, can be the ignition point for devastating fires that spread rapidly across communities. By monitoring and addressing these issues early, entire neighborhoods can be protected. Technology and sensor networks like Ting can help detect grid problems before wildfires ignite.
PropertyCasualty360: Where are they happening most? Are there places in the U.S with a higher stock of older homes?
Marshall: Overall, data shows that there is a higher frequency of fire hazards in the eastern U.S., which corresponds to older housing stock – where electrical panels, home wiring infrastructure and utility infrastructure have aged more than the west.
However, this trend is not hugely significant, and fire risks are present in all parts of the country. On more local scales, hazards tend to skew to older neighborhoods, but factors like poor construction quality and workmanship lead to hazards in new housing developments and buildings also.
PropertyCasualty360: How much do electrical fires cost insurance companies on average?
Marshall: Electrical fires are often the worst fires to impact homes, largely because these fires can start at night and when the home is unoccupied, allowing the fire to develop before detection. Since electrical fires cause a wide range of damage depending on their severity, the costs range widely as well.
The average loss ranges between $150,000 and $1,000,000. With that said, claims on electrical fires can be difficult to track, because fire claims can be difficult to categorize. Up to 70% of carrier fire claims can be “unknown” in origin since expert fire fighters and forensic engineers are unable to identify a specific cause after a catastrophic home fire.
Overall, we’ve identified that electrical fires are underrepresented in claims data by about 50%. Like most home and auto claims, the severity, or cost per claim, has increased significantly in recent years due to inflation and supply chain challenges.
PropertyCasualty360: Are there adequate solutions in place to prevent electrical fires?
Marshall: The key to preventing electrical fires is identifying the problem at the source, and doing so early. Whether it’s arcing wires, faulty appliances or risky connection between the home and the utility provider, it’s critical that homeowners are first made aware of the problem before steps are taken to fix it.
Once identified, generally all that’s needed is maintenance or replacement – with wiring and appliances, a certified electrician can inspect and repair most issues and ensure they pose no further threat. With utility-related problems, the utility provider can service any issues that may put a home at risk.
Electrical fire hazards are extremely difficult to detect and often invisible to the homeowner, making it hard to prevent a fire. This is why we at Whisker Labs created Ting.
Ting can be plugged into any outlet in a home, and from there, it will monitor the entire electrical system in a home. Through sophisticated machine learning and AI, Ting can find hazards like arcing wires and damaged switches.
After detection, Whisker Labs takes care of the rest, covering up to $1,000 of the required labor repair costs, and providing a qualified technician to come and solve the problem. Ting has helped in saving over 13,000 homes – now around 25 per day – since its 2018 launch. Ting is documented to prevent ~80% of electrical fires.
Beyond Ting, we also advocate that all homeowners should use their own senses to detect problems that could lead to fires. Electrical failures often, but not always, provide hints of their existence, producing acrid smells and crackling noises, flickering lights or intermittent device operation. None of those symptoms should be treated lightly and should be investigated ASAP. Schedule a licensed electrician to check things out if any of these symptoms exist.
PropertyCasualty360: Do you have any personal experiences with an electrical fire to your home or property?
Marshall: I originally started Whisker Labs after a family member lost their home and pet to a devastating electrical fire. This caused me to realize the pain and suffering that accompanies these events. But these catastrophes are largely preventable with advanced technology, and it would just take a special device to be able to detect them before they happen, which led to the creation of Ting.
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