Pennsylvania Homeowners Insurance – Pennsylvania Hazard Insurance

Pennsylvania Homeowners InsuranceCommonwealth of Pennsylvania – Insurance

The State Motto is Virtue, Liberty, and Independence.  Pennsylvania is known as ‘The Keystone State’; in the early days of  America, Pennsylvania played a vital geographic and strategic role in maintaining the unity of the newly formed Union. With a population of  almost 13 million people, it houses the nation’s 6th largest population by State residing in Philadelphia, Pittsburgh, Allentown, Erie, Reading, Scranton and outer lying areas.   

Pennsylvania Homeowners Insurance

Homeowners Insurance, also known as Hazard Insurance, will cover your home and your personal belongings and contents of the home, such as furniture, appliances, clothing etc…

Although purchasing homeowners insurance is not obligatory by law,  mortgage companies all require you to purchase insurance as a condition of the mortgage contract.

Pennsylvania Homeowners Policies

Homeowners policies in Pennsylvania commonly include the following coverage:

  • Dwelling pays if your house is damaged      or destroyed by a covered loss.
  • Personal property pays if the items in your      house are damaged, stolen, or destroyed.
  • Other structures pays to repair or rebuild      structures not attached to your house, such as detached garages, storage      sheds, and fences.
  • Additional Living Expenses pays your additional living      expenses (housing, food, and other essential expenses) if you must      temporarily move because of damage to your house from a covered loss.
  • Personal liability pays to defend you in court      against lawsuits and provides coverage if you are found legally      responsible for someone else’s injury or property damage.
  • Medical payments pays the medical bills of others      who suffer accidental injury on your property up to the limit listed on      the policy.

Note about replacement cost and actual cash value:

  • Replacement cost is what you would pay to      rebuild or repair your home, based on current construction costs.      Replacement cost is different from market value and doesn’t include the      value of your land.
  • Actual cash value is what you would pay to      rebuild or replace your property minus depreciation. Depreciation is a      decrease in value due to wear and tear or age.

Policy Coverage

Companies may exclude coverage for certain losses. Even the most comprehensive all-risk policy will exclude certain types of damage.

The following chart shows the most common types of losses covered or excluded from a homeowners policy:

Most Policies Cover Losses Caused by

Most Policies Do Not Cover Losses Caused by

Fire and   lightning Flooding
Sudden and   accidental damage by smoke Earthquakes
Explosion Termites,   insects, rats, or mice
Theft Freezing   pipes while your house is unoccupied (unless you turned off the water or   heated the building)
Vandalism   and malicious mischief Losses if   your house is vacant for the number of days specified by your policy
Riot and   civil commotion Wear and   tear or maintenance
Aircraft   and vehicles Wind or   hail damage to trees and shrubs
Windstorm,   hurricane, and hail (this coverage may be excluded if you live on the Gulf   Coast) Mold,   except what is necessary to repair or replace property damage caused by a   covered water loss
Sudden and   accidental water damage Water   damage resulting from continuous and repeated seepage

Policy Dollar Limits

A policy’s dollar limits are the maximum amounts your insurance company is obligated to pay in the event of a covered loss. The Declarations Page is the summary page attached to the policy and shows the policy’s dollar limits.

To receive full payment (minus your deductible) for a partial loss (such as a hail-damaged roof) most companies require you to insure your house for at least 80 percent of its replacement cost. If you insure your house for less than 80 percent of the full replacement cost, the insurance company will only pay a portion of the loss; this is known as the coinsurance clause. Most preferred carriers require you to insure your house for 100 percent of its replacement cost.

Coverage for Your Personal Property

Homeowners policies provide coverage for your personal property (such as furniture, clothing, and household electronics).

Homeowners policies usually cap the coverage amounts for certain types of personal property, such as jewelry, silverware, furs and art. You may be able to buy additional coverage for these items for an extra premium.


Inventory Your Property

Many people learn after a fire or burglary that they aren’t able to remember exactly what is missing without either a detailed inventory or photos of each room in the home prior to the loss.  A written inventory will help one decide how much insurance would be required in the event of a total fire loss.

It would be a great idea for each insured homeowner to digitally photograph or videotape each room, including closets, open drawers, storage buildings, and garage; these digital files can be stored on a cloud based network or simply on a disk with copies in more than one location. A written inventory and receipts for major items should be stored in a fireproof safe or an alternate location.

Other Types of Residential Property Policies

  • Renters insurance. A landlord’s insurance policy doesn’t      cover a renter’s personal property. Renters insurance covers your      belongings, provides liability protection, and pays additional living      expenses if a fire or other event stated in your policy forces you to move      temporarily.
  • Condominium insurance. Condominium insurance covers      your belongings, provides liability protection, and pays additional living      expenses. It also covers damage to improvements, additions, and      alterations to the condo.
  • Townhouse insurance. Townhouses may be insured by      either an individual homeowners policy or an association master policy. If      a townhouse is owner-occupied and the townhouse association doesn’t have a      master policy on the building, you can purchase a homeowners policy on      your individual unit.

Extra Coverage (Endorsements)

If you want more coverage than the policy offers, you might be able to add an endorsement to your policy for an extra premium.

The following are common endorsements you can consider adding to your policy:

  • Backup of sewers or drains. Pays for damage caused by      sewer or drain backup.
  • Extended or additional dwelling      replacement coverage. Pays up to a certain amount if your policy      doesn’t pay enough to rebuild your home.
  • Law or ordinance coverage. Pays if repair costs are      higher because of local building codes or ordinances.
  • Replacement cost-dwelling. Pays replacement cost after      you repair or replace your property.
  • Replacement cost-personal      property. Pays      replacement cost after you repair or replace your property.

Personal Umbrella Liability Insurance

If you have assets to protect and require more personal liability coverage than a homeowners policy provides, you can buy a separate umbrella policy. The Personal Umbrella Policy provides a secondary layer of coverage picking up where your underlying Homeowners and Automobile limits are exhausted.  The Personal Umbrella Insurance will require a minimum underlying limit of liability on both the Homeowners and Automobile policy.

Review your Policy

After you buy a policy, review it to ensure that everything is correct. Review the following items listed on the declarations page:

  • Your name and the property      location.
  • Policy period. This is the date the policy is      in effect. Your mortgage company or lienholder will use this date to      ensure that you have insurance on your property.
  • Coverage. This section lists your      property and liability coverage and limits. Consider whether your property      coverage limits are high enough to replace your house and personal      property if they are damaged or destroyed. You can increase property and      liability coverages if you don’t think they’re high enough.
  • Deductible. The deductible is listed as a      dollar amount and a percentage for each type of coverage. The deductible      is the amount that will be deducted from your payout in the event of a      covered claim.
  • Policy premium. This is the cost of your      policy after your endorsements and discounts.
  • Mortgagee. Make sure the name, address and      loan number of your mortgagee are correct. The listed address will be      where the insurance carrier will mail the ‘Mortgagee Copy’ of your      insurance policy; if this is incorrect, you will most likely receive a      letter from your mortgage company.

Understanding Rates and Premium

Factors that Affect Your Premium

Companies use a process called underwriting to decide whether to offer a policy and what rate to charge. Each company must file its underwriting guidelines with Pennsylvania Department of Insurance and send updates if the guidelines change. Companies use various factors to determine premium. These include:

  • Home’s age and condition. Preferred companies will      refuse to insure homes in poor condition, but they may not deny coverage      solely because of a home’s age or value. Companies will charge more if      insuring an older house. If one has a replacement cost policy, the policy      will pay to rebuild the insured home if it’s destroyed by a covered peril.      Premiums will increase in relation to the amount of replacement or      reconstruction cost.
  • Construction materials used in      home. Homes      built primarily of brick are less expensive to insure than frame homes      since brick homes are less likely to burn.
  • Where you live. Premium will likely be higher      in areas with a higher crime or high storm activity; premium is always      assessed in relation to risk.
  • Availability of local fire      protection.      Premium are usually lower for homes in areas with access to good fire      protection. Protection classes are assessed to areas based on distance      from closest fire station and distance between fire hydrants.
  • Your claims history. Companies use claims history      to determine what to charge for your coverage. Your claims history      includes both the type and the number of claims filed. Claims activity may      also disqualify one from insuring with a ‘preferred carrier’ most often      offering the lowest premium.
  • Your credit score. In Pennsylvania, companies may      consider your credit score when deciding whether to insure a home and the      premium to assess. However, a carrier may not refuse to insure, cancel or      non-renew a policy solely because of credit score. Companies that use      credit scoring must file their credit scoring models with the Pennsylvania      Department of Insurance. It would be prudent to review your credit report      each year and correct any errors as carriers are permitted to grade risk      utilizing personal finances as a factor.


Discounts can reduce insurance premium. All companies offer some type of premium discounts when reducing risk. Each company sets the amount of the discounts it offers. A discount may be offered for having:

  • an impact-resistant or      noncombustible roof
  • burglar, fire, and smoke alarms
  • an automatic sprinkler system
  • fire extinguishers
  • other policies with same      company or group
  • no claims for three years in a      row.

Some discounts may be automatically offered based on the criteria obtained to get a home insurance quote, whilst others may require proof or certification.  Some carriers offer discounts for marital status, age & accredited builder discounts on newer homes.


Many companies use the Comprehensive Loss Underwriting Exchange (CLUE) to review your claims history. CLUE reports list the property insurance claims history of people and houses – regardless of who owned them – for the last seven years.

Companies are only allowed to report information if someone filed a claim. Federal law gives you the right to challenge wrong information. If an insurance company based part of its decision to deny you coverage on a CLUE report, you can get a free copy of the report by calling LexisNexis Personal Reports at 1-866-527-2600 or by visiting its website at

Before calling, get the CLUE reference number from the company’s denial letter or from the company. Using the reference number will speed the process by making sure you are requesting the right report. CLUE is a registered trademark of Equifax Inc.

Consumer Affairs

In the event of unresolved insurance issues, you may contact the Pennsylvania Insurance Department’s toll-free Consumer Line at:  1-877-881-6388.  Customers may also visit the Department of Insurance Website at: