Ungrounded Electric Outlets
Will I be able to get homeowners insurance with Ungrounded Electric Outlets?
Currently most Homeowners Insurance companies will allow ungrounded electric outlets if they meet the National Electric Code for safety. An Electrician should write the insurance company a letter stating that the ungrounded electrical outlets have been mitigated according to the National Electric Code. This ensures that it is now safe for use.
According to the National Electric Code NEC 406.3D, there are 3 options to make ungrounded outlets safe:
1) Replace the ungrounded outlets with a non-grounding type outlet (2 prong outlet)
2) Replace the electric outlet with a GFCI outlet however you must label the outlet “No equipment ground provided”
3) You can use a grounding type receptacle if it is GFCI protected. It should be labeled “GFCI protected” and “No Equipment Ground Provided.”
NEC 406.3 General Installation Requirements talks about how to handle ungrounded electrical outlets. Here’s a simple, easy-to-understand explanation of the key ideas from the National Electrical Code (NEC) around receptacle grounding. This mainly involves sections like 406.4 and parts of Article 250:
Grounding the third prong (the round one) in a standard 3-prong outlet is super important for safety. If something goes wrong inside an appliance—like a wire coming loose and touching the metal case—the electricity can flow through the ground wire. Instead of through you if you touch it. This “fault” current quickly trips the circuit breaker or fuse. This shuts off power and prevents shocks, fires, or worse. Without a real ground, that third prong does nothing—it’s just there for looks, and plugged-in devices aren’t truly protected from faults.
For older homes with ungrounded wiring (only two wires: hot and neutral, no ground), you can’t just swap in a regular 3-prong outlet without fixing it properly. That would be unsafe and against code. But the NEC gives safe options when replacing old 2-prong outlets:
- Stick with a 2-prong outlet (it’s honest about having no ground).
- Install a special GFCI (Ground Fault Circuit Interrupter) outlet. GFCIs are smart—they watch for tiny leaks of electricity. This happens if current starts going where it shouldn’t, such as through water or a person. They shut off power super fast, even without a ground wire. You can use a 3-prong GFCI outlet this way. However, you must label it “No Equipment Ground” (and often “GFCI Protected”) so people know the third prong isn’t actually grounded.
- Downstream outlets on the same circuit can also be 3-prong if protected by that GFCI.
The best long-term fix is adding a real ground wire (or rewiring the circuit). These rules let you upgrade safety in old homes without tearing everything apart. Always have a licensed electrician do the work—electricity is dangerous! If you’re dealing with this in your home, a pro can test and recommend the right solution.