[villagetinker]

Originally Posted by dirtbanker

Canceling coverage is not to be confused with declining to pay a claim on policy for an electrical fire that has occurred...

I wonder how the insurance company would know if you had the defective brand of breakers, maybe it was a question on the disclosure sheet (or maybe the guy just lied to sell a new breaker panel)?

I have never heard of anyone being prosecuted for building code violations, I wonder how many years the average sentence is, and if those are served in a maximum security prison?

I agree, cancelling is different from not paying a claim, but it might give the insurance company a reason to not pay.
The person that pointed out the bad breakers was the county electrical inspector. I did not push the point, as I was able to verify with UL that these breakers had been delisted due to problems. I do not know if a report would have been filed as a result of the observation of the electrical inspector, it was my choice to have the entire panel replaced. (Note there were no replacement breakers for this particular style of breaker.)
And while I agree it is rare that a homeowner gets prosecuted for building code violation, building owners (apartments, etc.) get caught all the time, so it may be possible.

The bottom line here is hire the electrician to find out why the ARC fault breaker is tripping, do not replace with another type of breaker, and do not ignore the problem.