understanding how insurance claims can be denied when unlicensed electricians do the work
if you’re filing an insurance claim after an electrical incident, you might wonder how the licensing status of the person who did the work could affect your claim. the short answer is that many policies require that electrical work be performed by licensed professionals when required by law or policy. if unlicensed work is discovered, insurers can deny or reduce a claim. here’s a clear, reader-friendly guide to what that means, with real-world-style examples to illustrate.
why licensing matters for insurance claims
many homeowners insurance policies require that electrical work be done by licensed electricians and that all work complies with local codes and standards.
permits and inspections are often tied to licensed professionals. if work is performed without the proper permits or inspections, coverage can be impacted.
insurance is about transferring risk to a licensed professional who follows safety and code requirements.
insurance is about transferring risk to a licensed professional who follows safety and code requirements. when the work isn’t performed by a licensed person, the insurer may view the claim as higher risk or non-compliant, which can lead to denial or partial denial.
misrepresentation or failure to disclose who performed the work can also trigger denial, since honesty about the contractor and licensing status is part of many policy terms.
how insurers determine licensing status during a claim
permits and inspections: if the jurisdiction requires a permit, the insurer will look for permit records and inspection results. no permit or failed inspections can raise red flags.
contractor licensing records: insurers may verify whether the person or company who did the work held a valid license at the time of service.
documentation and receipts: invoices, contractor licenses, insurance certificates, and warranty documents help establish who performed the work.
evidence of workmanship and compliance: if the work appears non-compliant with code or unsafe, the insurer may investigate and reserve the right to deny or limit coverage.
disclosure by the insured: if you’ve disclosed that an unlicensed person did the work, the insurer will scrutinize the claim more closely.
common denial grounds
1. unlicensed work violates licensing rules or policy terms
a homeowner hires a person who is not licensed to perform electrical work, like wiring panels, ev chargers, generators, etc. the insurer interprets this as a violation of licensing requirements and a breach of policy terms, leading to denial or partial denial of the claim.
2. work not permitted or not inspected
replacing outlets or running new circuits without obtaining the required electrical permit or not arranging a final inspection. this can trigger denial because the work was not performed under approved, inspectable conditions.
3. non-compliance with electrical codes
wiring done to “save time” but using improper gauge wires or unsafe splice methods that fail to meet national electrical code (or local equivalent). the resulting damage may be attributed to faulty, non-code-compliant work.
4. misrepresentation or lack of disclosure
claimant states the work was done by a licensed electrician, but records show it was performed by an unlicensed individual. the inconsistency can void the claim or parts of it.
5. subcontractor licensing issues
a licensed contractor uses an unlicensed subcontractor for critical electrical work. if the policy requires all electrical work to be performed by licensed personnel, the insurer may deny coverage for the unlicensed portion.
6. expired or invalid license
the person who did the electrical work held a license that had expired, or the license was not valid in the jurisdiction where the work occurred. this can lead to denial or partial denial.
7. lack of proper permits or documentation
no permit was filed for a major electrical modification, and there is no documentation of compliance with local rules. insurance claims arising from issues tied to that modification may be denied.
8. unsafe or poor workmanship leading to further damages
faulty wiring causes a short and a subsequent fire. if the root cause is traced to unlicensed, unqualified, or shoddy workmanship, the insurer may deny coverage for the damages caused by that root cause.
9. diy or unprofessional installation masquerading as professional work
homeowner attempts a diy electrical repair and later files an insurance claim for related damage. the lack of professional workmanship and licensing can be a basis for denial or reduction.
10. invalid or no insurance coverage for the contractor
an unlicensed contractor who caused damage cannot hold proper liability coverage. some policies require that the person who performed the work carry appropriate liability or workers’ comp coverage; absence of such coverage can influence the claim decision.
examples to illustrate the impact
- example 1: a homeowner hires an unlicensed person to replace a faulty outlet. a fire starts due to poor workmanship. the insurer learns the contractor lacked a valid license and no permit was obtained. result: claim denial for the fire damages tied to the unlicensed work, possibly with separate coverage questions remaining for unrelated damage.
- example 2: a remodel includes running new wiring in the kitchen without a permit. the insurer investigates and finds no permit or inspection. result: denial of the portion of the claim tied to the electrical work, and the rest of the claim may be adjusted accordingly.
- example 3: an insured claims water damage from a leaky pipe, but the root cause is a faulty electrical conduit installation by an unlicensed electrician leading to a short. the claim for damages caused by the short can be denied because the root cause stemmed from unlicensed work.
- example 4: a licensed contractor uses a subcontractor who isn’t licensed to handle critical electrical connections. if the policy requires that all electrical work be performed by licensed personnel, the insurer might deny the portion of the claim linked to those specific tasks.
how to protect your coverage and avoid denial
hire licensed professionals like arc electric + lighting for electrical work. verify licenses with the appropriate state or local authority and confirm they’re active.
get the necessary permits and ensure inspections are completed and documented.
use a reputable contractor who carries liability insurance and workers’ comp. request proof and keep copies.
keep thorough records: signed contracts, invoices, license numbers, permit numbers, inspection reports, and any correspondence with the insurer.
do not misrepresent who did the work. if someone else performed the work, be transparent with your insurer from the start.
before starting any electrical project, check your policy language or speak with your insurer about requirements for licensed electricians and permits.
if a claim is denied, what can you do?
review the denial letter carefully to identify the specific grounds for denial.
gather documentation: license verifications, permit records, inspection reports, contractor invoices, photos of the work, and correspondence with the contractor.
contact your insurance agent or adjuster to discuss the denial and what documentation is needed to reconsider.
if needed, seek a second opinion from a licensed electrician or a public adjuster who can help review the claim details.
consider legal advice if you believe the denial is incorrect or unfair, especially if licensing requirements were clearly met or misrepresented.
quick recap
licensing status of the person who did electrical work can influence insurance claims.
denials typically arise from lack of permits, code non-compliance, misrepresentation, or unsafe workmanship.
protect yourself by hiring licensed professionals, obtaining permits, keeping records, and communicating clearly with your insurer.
if denied, gather evidence, consult your insurer, and seek professional guidance as needed.
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