INSURANCE
Homeowners
GUIDE
The Pennsylvania Insurance Department is here
to help you understand homeowners insurance.
In the next few pages you will learn about types
of coverage available, some tips on how to shop,
and what you should do if you need to make a
claim.
Insurance policies can vary. This guide is
intended to help you understand homeowners
insurance. The information is general and
not specific to your insurance policy. If you
have specific questions about your coverage,
you should consult your agent or insurance
company.
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What Is Homeowners
Insurance?
Your homeowners insurance policy is a legal
contract between you and your insurance company.
It protects you against financial loss if there is
damage to your home and your possessions and
liability in case someone gets hurt in your home or
on your property.
Keep your policy in a safe place and know the
name of your insurer. Be sure to discuss with your
insurance company the terms in your policy. If
you have questions contact your insurance agent or
company for clarification. If you still have questions,
visit our website at www.insurance.pa.gov or
you can write to or call us.
Do I Need to Buy Homeowners
Insurance?
Homeowners insurance is not mandatory in
Pennsylvania but most banks or lenders will require
you to cover your home for at least the amount
of the mortgage. If you are
looking for a homeowners
insurance policy, always
shop around and
compare coverage and
price. Homeowners
insurance protects
your home and your
personal property. It
may also protect you
against lawsuits if someone
gets hurt on your property.
Below is more information on the different types of
coverage a homeowners policy can provide.
*You are not required to purchase insurance from the
insurer recommended by the lender.
Your home is more than just shelter;
it’s an asset worth protecting.
Your home is more than just shelter;
it’s an asset worth protecting.
Let’s Look at Coverage in More
Detail
Homeowners insurance policies usually contain a
package of coverages that offers protection when a
peril occurs. A peril is the cause of a possible loss,
like a fire, that you protect yourself from when you
purchases an insurance policy.
Dwelling coverage pays for damage to your house
and structures attached to your house. This includes
damages to fixtures such as plumbing, electrical
wiring, heating, and permanently installed cooling
systems.
Other Structures coverage pays for damage to
structures not attached to the dwelling. These include
detached garages, sheds, fences, guest houses, etc.
Personal Property coverage reimburses you for
damage to or theft of your personal property. This
covers things like furniture, appliances, electronics,
lawn equipment, clothing, etc. It also protects your
belongings even when they aren’t on your property.
Loss of Use coverage pays for additional living
expenses if you can’t live in your home (because
of a covered peril) while it’s being repaired.
Medical Payments to Others provides coverage
for medical bills for people hurt on your property
or hurt by your pets.
Personal Liability protects you, your relatives
in the household and residents in your household
under the age of 21 if you are sued and found legally
responsible for injury or damage to their property.
This coverage also extends to students under the age
of 24 enrolled full-time at school or college (with
certain exceptions).
Please refer to the Glossary found on page 14 for definitions of the terms in bold face.
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on a claim. For an additional
cost, consider an inflation guard
endorsement which raises the
amount of your dwelling coverage
annually in line with inflation.
Other Structures
Typical coverage for these
structures is limited to 10 percent
of the dwelling coverage limit.
Personal Property
Typically coverage for personal property is provided
at a percentage of the dwelling coverage limit. You
can choose to insure your personal property at the
replacement cost or actual cash value.
Also, if you are away for business or on vacation,
your personal property brought with you is
typically insured for 10 percent of your homeowner’s
policy’s personal property coverage or $1,000,
whichever is greater.(unless you ask for a higher
limit)
Keep in mind that coverage for some property
such as jewelry, furs, antiques, coins, guns,
and art may be limited. You can purchase
additional coverage called a scheduled personal
property endorsement to better protect these
items.
Loss of Use
Typical coverage for loss of use is 20 percent
of the dwelling coverage limit.
Personal Liability
You choose the amount of liability protection that is
appropriate for your situation. Most policies
offer $100,000 with higher limits available
for an additional cost.
Medical Payments
Basic amounts of coverage are usually $1,000
per person and higher limits may be available
for an additional cost.
How Much Coverage
Should I Buy?
Your coverage limits are the
most your insurance company
will pay. Your homeowners
insurance coverage will depend on
your individual needs, as well as
limitations set by your insurance
company. Higher limits may be
available for an additional cost.
Here are some things to keep in
mind when you are trying to figure
out how much coverage you should buy:
Dwelling
Replacement cost is the amount to replace or
rebuild your home or repair damages with materials
of a similar kind and quality without deducting for
depreciation. Often the cost to rebuild a home in
accordance with current building codes with new
raw materials at current labor rates is significantly
higher than the proceeds you would receive if you
Your homeowners insurance
coverage will depend on your
individual needs, as well as
limitations set by your insurance
company.
Your homeowners insurance
coverage will depend on your
individual needs, as well as
limitations set by your insurance
company.
were to sell your home. The replacement cost is not
the same as the market value of your home, which
includes your land and depends upon what someone
is willing to pay to buy your property. Actual cash
value is the replacement cost of your home minus
age and wear and tear. Many times an actual cash
value policy does not pay enough to fully return
your home to the way it was before an incident.
You should review your amount of coverage
annually. A good rule of thumb is to insure your
home for at least 80% of its replacement value. If
your coverage drops below 80 % of full replacement
cost, the company may reduce the amount paid
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If you have an older home for which the cost
to rebuild is significantly higher than its
market value, the Modified Coverage Form
(Form 8) is available. Insurers generally do
not want to offer standard insurance coverage
that far exceeds the market value of the
home because this may provide an incentive
to commit insurance fraud. The Modified
Coverage Form provides “functional
replacement cost” coverage meaning older
materials used in the home’s construction that
are no longer available can be repaired using
materials commonly available today. The form
provides similar, but less coverage than the
Broad Form.
Your landlord’s homeowners insurance does
not cover your belongings. Often referred to
as renters insurance, the Contents Broad
Form (Form 4) provides protection against
damage to or theft of your personal property.
It can also protect you if someone falls or gets
hurt on the part of the premises you rent.
Renters insurance is often overlooked. For a
small premium, you can save a lot of money
if something happens. You must request and
obtain the specific amount of coverage you
need with a renters insurance policy.
If you own a condominium, the Unit-Owners
Form (Form 6) is for you. This form is
designed for condominium owners and offers
coverage similar to that provided to
homeowners with the Broad Form. This type
of policy insures the contents and property
not covered by the condominium association’s
policy. You must request and obtain the
specific amount of coverage you need.
What Types of Homeowners
Policies Are Available?
As mentioned before, homeowners insurance
policies usually contain a package of coverages
that offer protection from loss when a peril
occurs. Some policies are specifically for single-
family homeowners, condominium owners,
and renters. Some policies cover all perils
except those specifically excluded; others cover
only the perils specifically named in the policy.
The different types of homeowner policies are
known as Forms. Talk to your agent or insurance
company to determine which Form best fits your
needs.
Let’s Talk About the
Different Forms
The Homeowners Broad Form (Form 2)
covers the dwelling, other structures (such as
a detached garage or shed), personal property,
personal liability, and medical payments.
The Broad Form policy covers perils specifically
named in the policy. In a Broad Form policy
if the peril is not named, it is not covered.
The Homeowners Special Form (Form 3),
also covers damage to the dwelling, other
structures, personal property, personal
liability, and medical payments. The difference
between the Broad Form and the Special Form is
that the Special Form tells you specifically which
perils it will not cover. This form provides more
coverage for the home and other structures than the
Broad Form.
The Homeowners Comprehensive Form
(Form 5), provides broader coverage than
Forms 2 and 3, especially for your personal
property. Many additional coverages available on
an optional basis on Form 3 are automatically
included in the Homeowners Comprehensive
Form.
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How Do I Create a
Home Inventory Checklist?
A home inventory checklist can be invaluable when
deciding how much insurance coverage fits your
life situation. The checklist makes sure you are
adequately protected should you need to file a claim.
The National Association of Insurance Commissioners
(NAIC) offers the following advice on how to create a
home inventory checklist.
• Group your possessions into logical categories,
i.e., by hobby, by room in your home, etc.
• Your list should include celebration purchases like
jewelry and art, as well as everyday leisure items
such as televisions and guitars.
• Don’t forget items you use rarely such as holiday
decorations, sports equipment, tools, etc.
• Pull together copies of original sales receipts and/
or appraisal documents. Also note model and serial
numbers.
• Carefully photograph or videotape each item and
document a brief description, including age,
purchase price and estimated current value.
• Store your home inventory and related documents
in a safe, easily accessible place online, on your
computer or in a fire-proof box or safe deposit box.
Consider sharing a copy with friends, relatives and
your insurance provider.
• The NAIC’s free myHOME Scr.APP.
book downloadable app lets you
quickly photograph and capture
descriptions of your possessions room
by room, then store electronically for
safekeeping. The app is available for
iphone® and Android devices. Click
here to watch the demonstration video.
If paper checklists are better for you, feel free to print
out the checklist from the NAIC on the last page.
What is Not Covered?
The coverage provided depends upon the type
of policy you buy, but there are some common
exclusions found in most homeowners policies. They
include but are not limited to earthquake (for which
coverage can typically be separately purchased);
collapse; flood; mold; fungus; wet rot; wear and tear;
mechanical breakdown; smog; rust; corrosion; dry
rot; smoke from agricultural smudging or industrial
operations; discharge, dispersal, seepage, migration,
release or escape of pollutants; settling, shrinking,
bulging or expansion, including resultant cracking of
bulkheads, pavements, patios, footings, foundations,
walls, floors, roofs, or ceilings; birds, rodents, or
insects nesting or infestation, or discharge or release
of waste products or secretions by any animals or
animals owned or kept by an insured. Be sure to
talk to your agent or insurance company about
exclusions.
What Should I Know Before I
Start to Shop?
You should know what coverage you need, as well as
the limits and deductible amounts that are right
for your situation. Also, you should have
the following information available:
Lender contacts and mortgage
documentation
Information on home improvements,
i.e., new roof, repairs, etc.
Home inventory, with photographs
Appraisal for any special items, such as jewelry,
furs, antiques, coins, guns, art, etc.
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4
2
3
Be sure to talk to your agent
or insurance company about
exclusions.
Be sure to talk to your agent
or insurance company about
exclusions.
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• Your credit history. To access your credit report,
the insurance agent might ask you for your Social
Security number. In many states, insurers use
your credit history as a factor to decide whether to
sell you insurance and what price to charge you.
• Your history of filing claims for water damage,
fire, theft, or liability on homes you’ve owned.
Other characteristics
• Having protection devices in your home, such
as smoke detectors, a burglar alarm, a sprinkler
system, dead bolts on doors, or security devices for
windows. Many insurers offer a discount if you
have any of these.
• Having a wood furnace or wood stove.
• Having a swimming pool, trampoline, or
playscape that could cause injuries.
• The types of pets you have. Some insurers won’t
insure you if you own certain breeds of dogs.
• Operating a business from your home.
Know How to Save
Always be sure to shop around
for both price and coverage.
Prices for similar coverage can
vary greatly among companies.
In other cases, the company
offering the cheapest price might
also be offering the least coverage. It is
important to know what you are paying for.
Shopping around isn’t the only thing you can do to
get the best price for the best coverage. Here are some
other ideas for you to use.
How Does an Insurance
Company Figure My
Premium?
Many factors affect the premium you
pay, including the insurance company
you use. The National Association of Insurance
Commissioners (NAIC) provides the following list of
things that could affect your premium.
The characteristics of
your home
• The cost to rebuild your
home. This is not the same
as the purchase price (which includes the cost of
the land). Your insurance agent might help you
estimate replacement cost using information
about your home and its contents.
• Whether your home is made of brick or wood.
The premium usually is lower for homes that are
primarily brick or masonry than for wood frame
homes.
• The distance from your home to a water source
or fire department and the quality of your
community’s fire protection services.
• The age and condition of your home. The
premium often is higher for older homes and
homes in poor condition than for newer homes
and homes in good condition.
• The claims history of your home and of homes
in your area.
Your choices and characteristics
• The coverages you choose, including optional
endorsements.
• The deductible you choose.
• Insuring your home and autos with the same
insurance company.
• The length of time you’ve been with your current
insurance company.
Always be sure to shop around
for both price and coverage.
Prices for similar coverage can vary
greatly among companies.
Always be sure to shop around
for both price and coverage.
Prices for similar coverage can vary
greatly among companies.
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insurance in your area. Additionally, contact your
neighbors, relatives, and friends for recommendations
on insurance companies and agents. Ask them
about their experience regarding price and service.
Specifically, ask them what kind of claim service they
have received from the companies they recommend.
What Questions Should I Ask
an Insurance Agent?
• What does the policy cover? What doesn’t
the policy cover? What are the limits to each of
the coverages purchased?
• How much liability coverage
do you recommend?
• What types of water
damage does my policy
cover? Does it cover mold?
• If I submit a claim, how will it impact my
premium?
• Do I need to fix things if an insurance company
asks me to?
• How can I check the home’s claims history?
• Will a history of claims on a property impact my
premium?
• Will my credit history affect how much premium
I pay?
• Should I buy flood insurance or earthquake
coverage?
If you are thinking about buying a home, you
can ask an insurance agent to estimate the cost of
insurance for the home or homes you are targeting.
Discounts
Be sure to ask if there are any discounts available.
Some insurers offer lower prices for things such as
insuring your home and car with the same company
and installing smoke detectors, burglar alarms, dead
bolt locks, and fire extinguishers.
Deductibles
By choosing a higher deductible you may be able
to lower your policy cost. Just remember that
the deductible you choose is what you are
responsible for paying out of pocket in the event
you file a claim.
If you choose to purchase a percentage
deductible that is based on the replacement
cost of your home ,the amount you owe could
add up. For example, if your home is insured
at a replacement cost of $200,000 with a
2 percent wind and hail deductible and the
roof is damaged due to wind and hail, you would be
responsible for the first $4,000 worth of damage.
Where to Buy Insurance
Now that you know what to look for and some ways
to save money when choosing your homeowners
insurance, let’s talk about where to buy a policy.
Agents
Agents (or producers) are individuals available
locally to address your insurance needs. Local agents
can be independent or exclusive. Independent agents
can compare policies and sell you the one that
bests fits your needs among the multiple insurance
companies they represent. Exclusive agents can only
offer you coverage from the company they represent.
Direct
Some insurance companies sell their policies directly
over the phone or Internet without using agents. In
some cases, you can choose to interact with a direct
company exclusively over the Internet.
Most insurance companies and many agents
advertise. Check the newspaper, Yellow Pages,
and the Internet for companies and agents selling
If you are thinking about buying
a home, you can ask an agent
to estimate the cost of
insurance for the home.
If you are thinking about buying
a home, you can ask an agent
to estimate the cost of
insurance for the home.
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the surplus lines market. Surplus lines companies are
permitted to issue policies to Pennsylvania residents,
but are not licensed by the Insurance Department.
Surplus lines policies are subject to many of the same
insurance laws and regulations as licensed insurers;
however, you will not be protected by the Guaranty
Fund should the company become insolvent. The
Guaranty Fund is similar to FDIC insurance for bank
accounts. If your insurer is unable to pay your
claim, the Guaranty Fund will pay it. However, the
Insurance Department does monitor surplus lines
companies to ensure their ability to pay claims.
What if I Use My Home
for Business?
Homeowners insurance
isn’t designed to cover
most business uses of
your home but some
policies may cover
things partially.
Your policy may
cover your computer
or laptop but
you should check
with your agent or
company. If you watch
children, your policy may
provide a limited amount of
coverage as long as you are not
paid. If you are paid to provide day
care services, you must buy more insurance to cover
any related liability.
What Happens if I Buy a Policy
from an Unlicensed Agent?
It is illegal for unlicensed agents to sell insurance.
Business cards are not proof that an insurance agent
or agency is licensed. If you do business with an
unlicensed agent or agency, you have no guarantee
that the coverage you pay for will ever be honored. If
you purchase insurance from companies not legally
doing business within Pennsylvania, you will also not
be protected by the Guaranty Fund.
How Can I Check a Home’s
Claim History?
How much you pay for homeowners insurance
could be determined in part by past damage and
insurance claims. Information on the date of any
specific damages, the type of claim filed by the
policyholder, and how much money was paid by
the insurance company, over the past five years is
in the Comprehensive Loss Underwriting Exchange
(C.L.U.E.) Home Seller’s Disclosure Report. The
C.L.U.E. report is owned and maintained by
LexisNexis Risk Solutions.
Homeowners’ Insurance companies may
use past damages and claims paid to
set insurance premiums. Only the
owner of a property can request a
C.L.U.E. report. Homeowners get
one free report per year under the
Fair Credit Reporting Act. Home
buyers can request a seller to
provide a C.L.U.E. report. The
report can reveal damages a seller
may not otherwise disclose or
know about.
Homeowners can ask their insurer
whether information from a C.L.U.E.
report is being used to set their premiums.
Homeowners can also use the C.L.U.E. report
to make sure the information is accurate concerning
not only damages reported but repairs made.
If you are ordering your C.L.U.E. report, you can
contact LexisNexis at (888) 497-0011 or visit
personalreports.lexisnexis.com.
What Happens if I Can’t Find a
Company to Insure My Home?
Pennsylvania’s “Fair Plan” guarantees the availability
of basic fire insurance for your home. Information
about the “Fair Plan” can be found online at www.
pafairplan.com or by calling 1-800-462-4972.
Another alternative for homeowners who are
unsuccessful in obtaining coverage for their home is
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You can verify that an agent is licensed by visiting
our website at www.insurance.pa.gov. Once on our
site, click “Consumers” on the top bar and select “Find
Insurance Professional.” If you suspect anyone or any
entity is operating without a license, you may report
it by calling the Insurance Department’s Anti-Fraud
Compliance Division at 717-705-4199.
I Have Homeowners/Renters
Insurance. Am I Covered if
There Is a Flood?
Probably not. It is important to be aware that the
typical homeowners or renters policy does not cover
damages resulting from a flood. Remember, there
may be a waiting period for your flood policy to take
effect. For example, there is a 30-day waiting period
for National Flood Insurance Program (NFIP) flood
insurance policies to become effective.
The Federal Emergency Management Agency (FEMA),
which administers the NFIP, has many educational
pieces to help consumers understand the basics of
flood insurance, how to protect your home, and what
to do if, in fact, you are the victim of a flood. In most
cases, the information on FEMA’s website is available
in English, Spanish, and other languages.
What Is a Flood?
The NFIP Dwelling Policy defines flood as:
1. A general and temporary condition of partial
or complete inundation of two or more acres
of normally dry land area or of two or more
properties (one of which is your property) from:
a. Overflow of inland or tidal waters,
b. Unusual and rapid accumulation or runoff
of surface waters from any source,
c. Mudflow.
2. Collapse or subsidence of land along the shore of a
lake or similar body of water as a result of erosion
or undermining caused by waves or currents of
water exceeding anticipated cyclical levels that
result in a flood as defined above.
Should I Consider Flood
Insurance?
Flood damage can happen to you, no matter where
your home, apartment, or business is located. You
can buy flood insurance even if your property is not
located in a Special Flood Hazard Area (SFHA).
Mortgage lenders, pursuant to federal law, may
require homeowners to purchase flood insurance if
the property is located in a high-risk flood zone.
Flood insurance can be purchased through
licensed property and casualty insurance agents
in Pennsylvania to cover almost any building
and its contents, including rental property and
condominiums. Tenants can buy protection for their
belongings as well.
How Can I Buy Flood Insurance?
Although flood insurance has traditionally only been
available to homeowners or renters through the
NFIP, today there are more options for consumers to
consider. Flood insurance is now available through
private insurers, including surplus lines insurers.
The Insurance Department advises consumers to
speak with their lenders to ensure that they are
willing to accept a surplus lines policy. For a list of
When purchasing flood
insurance, it is important
for consumers to consider
the kind of coverage
they need.
When purchasing flood
insurance, it is important
for consumers to consider
the kind of coverage
they need.
If you do business with an
unlicensed agent or agency,
you have no guarantee
that the coverage you pay
for will ever be honored.
If you do business with an
unlicensed agent or agency,
you have no guarantee
that the coverage you pay
for will ever be honored.
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licensed agents who can discuss surplus lines, visit
our web page at www.insurance.pa.gov.
When purchasing flood insurance, it is important for
consumers to consider the kind of coverage that they
need. Insurers offer different types of flood insurance
policies: dwelling—the structure of your home,
and contents—your personal property within the
dwelling.
What Should I Know About
Private Flood Insurance?
Many consumers now have the option of purchasing
flood insurance through private insurers. Consumers
can purchase private flood insurance through
providers licensed in Pennsylvania, or through
surplus lines carriers.
If you have NFIP coverage now and choose to pursue
private coverage, your premium could increase
significantly if you choose to return to the NFIP at
a later date. Also, you may be precluded from
certain hazard mitigation grant programs available
through FEMA and the NFIP if you choose private
flood insurance to insure property located in an
area which is prone
to flooding. For more
information regarding
hazard mitigation
grant programs, please
visit the PEMA and
DCED (PA Department
of Community
and Economic
Development) websites.
For a list of licensed
private insurers that offer dwelling and contents
flood insurance policies, visit our web page at www.
insurance.pa.gov.
For consumers who may have been redrawn into
SFHA, or whose property is only partially in a SFHA
plain, surplus lines policies may offer significant
savings. For consumers whose properties fall well
within SFHA or pose a high risk of flooding, the NFIP
may be the only option.
The Insurance Department advises consumers to
speak with their lenders to ensure that they are
willing to accept a surplus lines policy. For a list of
licensed agents who can discuss surplus lines, visit
our web page at www.insurance.pa.gov.
I’ve Been Redrawn into Flood
Hazard Areas. Now What?
If your home has been drawn into a SFHA and you
believe it to be in error, you can appeal the decision
by calling 1-877-FEMA-MAP or visiting the FEMA
website. To appeal your home’s placement in a
Special Flood Hazard Area (SFHA), you must show
that the lowest adjacent grade, or the lowest ground
touching the structure, is at or above the Base Flood
Elevation, the level to which water is expected to
rise in the 100-year flood projection FEMA uses to
designate SFHAs. It is the homeowners’ responsibility
to provide this information to FEMA in written form,
but there is no charge to the consumer for this Letter
of Map Amendment. However, you will likely need to
hire a professional to determine whether the Lowest
Adjacent Grade is above the Base Flood Elevation.
Flood insurance can be purchased for almost any
insurable property, even if it is not located in a SFHA.
An insurance agent or broker can assist you in
purchasing flood insurance. To obtain information
on flood insurance, please visit the insurance
department’s one-stop shop for flood insurance
information. From www.insurance.pa.gov, select
“flood” from the drop-down list under “Coverage.”
What if There Is a Sinkhole or
Earth Movement?
Damage caused by sinkholes or earth movement
are typically not covered by homeowners policies
unless requested and specifically purchased at an
additional cost. When natural running water seeps
into the soil and erodes underground limestone or
dolomite deposits, a cavern is formed. When the roof
of the cavern caves in, a sinkhole is formed. Earth
movement is categorized as earth shifting, rising,
or sinking. Communities above old mines may fall
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victim to mine subsidence, the “caving in” of old
abandoned mines. Residents in these communities
can purchase mine subsidence coverage through the
Department of Environmental Protection. Refer to
www.dep.state.pa.us/msihomeowners or call
1-800-922-1678.
Does My Policy Cover an
Earthquake?
Your homeowners’ policy most likely does not cover
damage caused by an earthquake. For an additional
premium, you can purchase an earthquake
endorsement for your homeowners’ policy that
will protect your home in case of an earthquake.
Filing a Claim
If you have a claim, read your policy.
Your policy is the guide to the types of losses that
may or may not be covered. How often you file a
claim and the types of claims you file often affect
your premium. To file a claim, contact your
insurance company as soon as possible. Follow the
instructions given by your insurer and keep a record
of the people you spoke with. Records should include
date, name, and title.
• Save all your receipts.
Be sure to give your
insurance company
all the information it
needs or your claim
may be delayed.
• Take photographs/
video before you clean
up or begin repairs.
• After you’ve documented the damage, make the
repairs necessary to prevent further damage.
Do not make any permanent repairs before the
insurance company is able to inspect the damage
and your insurance carrier approves the repairs.
• Always ask questions if you don’t understand.
• Don’t rush to a settlement. If possible, determine
what it will cost to repair your property
before you meet with an insurance company
representative who will assess the damage to your
property. If you and your insurance company
disagree on the offer made to repair your property,
be prepared to negotiate if necessary. If you and
your insurer still disagree about the value of a
claim, check your policy for an appraisal clause.
Another option is to hire an attorney or a public
adjuster.
A public adjuster is a professional claims handler,
licensed and regulated by the state. A public
adjuster is employed by you, the policyholder, to
assist with the claims process. You can verify that
a public adjuster is properly licensed by visiting
our website at www.insurance.pa.gov. Once on
our site, click “Consumers” on the top bar and
select “Find Insurance Professional.” If you
suspect anyone or any entity is operating as
a public adjuster without a license, you may
report it by calling the Insurance Department’s
Always ask questions if you
don’t understand.
Always ask questions if you
don’t understand.
Your homeowner’s policy most
likely does not cover damage
caused by an earthquake.
Your homeowner’s policy most
likely does not cover damage
caused by an earthquake.
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Anti-Fraud Compliance Division at
717-705-4199.
• Be sure you are working with a
reputable,
dependable contractor who is
appropriately registered and insured.
Home-improvement contractors that do more
than $5,000 of business per year in Pennsylvania
must register with the Attorney General’s Bureau
of Consumer Protection. Ask the contractor for
his or her Home Improvement Contractor (HIC)
number and verify his or her registration by
calling the Attorney General’s Home Improvement
Registration toll-free line at 1-888-520-6680.
Remember, many municipalities require that skilled
tradesmen, like electricians and plumbers, be
licensed in addition to being registered.
• Don’t sign paperwork with sections left blank.
Someone can fill in the information after you sign
the paperwork.
• Don’t pay the contractor in full or sign that
the work is complete until the work is actually
completed.
• Be cautious of contractors with work vans/trucks
that have out-of-state license plates and/or lack
signs or insignias identifying the company name.
If your claim is denied, review the terms of
your insurance policy for what is or is
not covered. You may also file an appeal
to your insurance company’s claim
manager. If questions remain, you
should contact the Insurance
Department‘s Bureau of Consumer
Services. Our toll-free hotline is
1-877-881-6388.
No matter how much insurance
you carry, no insurance policy
can adequately compensate you
for all your pain, trauma, and
inconvenience following a disaster.
Be sure to:
The laws in Pennsylvania do not
allow and insurance company to
terminate a homeowner’s insurance
policy for “claims” or “loss history.”
The laws in Pennsylvania do not
allow and insurance company to
terminate a homeowner’s insurance
policy for “claims” or “loss history.”
• Install appropriate smoke detector(s). These can
give you early notice of a fire and may save your
life. Cost is minimal.
• Practice home evacuation drills.
• Keep your policy and other important personal
items in a safe place such as a fire safe.
I’m a New Homeowner. Are
There Other Types of warranties
Related to Purchasing a Home?
Private mortgage insurance or PMI is usually required
by a lender if your down payment is less than 20
percent. PMI protects the lender if you default on
your mortgage. PMI premium is usually included in
your monthly mortgage payment.
Title insurance protects you and the lender against
monetary loss due to errors in the home title.
Many individuals purchasing a home will buy a
home warranty, which covers mechanical
breakdown of parts of the home
like electrical or plumbing.
This policy does not cover
the home’s structure
and many times does
not cover appliances.
Always review your
policy to understand
what is covered and
what is not covered.
These warranties are
not regulated by the
Insurance Department.
13
If an Insurance Company
identifies a hazard on my
property and I do not fix it, can
they cancel my policy?
Homeowners do need to respond to the request of
the insurance company or they could risk losing
coverage. Insurance companies do have a right to
manage the risks they insure on a property, within
reason. If you have questions about a request, you
can call the Pennsylvania Insurance Department. We
ensure the insurer’s requests are reasonable and the
homeowner is given sufficient time to make repairs.
Is There a Free Look Period for
Insurance Companies?
An insurance company has 60 days to underwrite
and investigate your application. The company
has the right to refuse or cancel your coverage for
various reasons within the first 60 days. However,
the company may not refuse someone because of
age, marital status, occupation, or any other unfairly
discriminatory reason.
What Should I Do If I Lose My
Insurance?
Immediately contact your agent or your insurance
company for specific details. Pennsylvania law allows
companies to cancel or non-renew policies for certain
reasons. If you are not satisfied with your company’s
explanation, submit your notice along with a
statement detailing the reasons you disagree with the
action to the Pennsylvania Insurance Department.
The statement must be received by the Insurance
Department within 10 days of your receipt of the
cancellation/non-renewal notice.
Can an Insurance Company
Cancel My Policy if I Do Not Pay
My Premium on Time?
Your insurance company can cancel your policy if
you do not pay your premium on time. Pennsylvania
insurance law does not require companies to extend a
grace period for premium payments.
Can an Insurance Company
Cancel My Policy Because of
Too Many Claims?
The laws in Pennsylvania do not allow an insurance
company to terminate a homeowner’s insurance
policy for “claims” or “loss history.”
Whether you have a
general question, or want
to file a complaint, you can
get help online at Consumer
Services. Go to:
www.insurance.pa.gov
or contact us toll-free at
1-877-881-6388.
Whether you have a
general question, or want
to file a complaint, you can
get help online at Consumer
Services. Go to:
www.insurance.pa.gov
or contact us toll-free at
1-877-881-6388.
14
Homeowners Insurance
Glossary - a Supplement to the
Homeowners Insurance Guide
These definitions are offered to give you a general
understanding of the terms you may hear that are
associated with homeowners insurance. Please note
that your individual company may define similar
terms differently. The definitions page in your policy
is the final authority regarding your coverage.
Actual Cash Value
The replacement cost of your home minus
depreciation (i.e., for age and wear and tear).
Additional Living Expenses/Loss of Use
Pays for additional living expenses if you can’t live
in your home (because of a covered loss) while it’s
being repaired.
Broad Form (Form 2)
Covers the dwelling, other structures (such as
a detached garage or shed), personal property,
personal liability, and medical payments. The Broad
Form policy covers perils specifically named in the
policy. In a Broad Form policy, if the peril is not
named, it is not covered.
Claim
Notice, typically from the policyholder, to an
insurance company that a loss has occurred which
may be covered under the terms of the policy.
Comprehensive Form (Form 5)
Provides the same coverage as the Special Form
policy plus additional coverage for contents. The
coverage in the policy is open perils.
Contents Broad Form (Form 4)
Often referred to as renters insurance. This
coverage provides protection against damage to
or theft of your personal property. It also protects
you if someone falls or gets hurt on the part of
the premises you rent. Renters insurance is often
overlooked. For a small premium, you can save
a lot of money if something happens. You must
request and obtain the specific amount of coverage
you need with a renters insurance policy.
Deductible
The amount a policyholder is responsible to pay
up front before covered benefits from the insurance
company are payable.
Dwelling
A place of residence like a house or apartment
(renters insurance).
Endorsements
A policy form that amends the main policy. More
often than not, endorsements provide coverage
in addition to that which is provided on the base
policy for an additional cost. One example is the
Earthquake Endorsement.
Exclusion
A provision in the policy that explains what is not
covered.
Insured
The person(s) entitled to covered benefits in case of a
loss or accident.
Insurer
The insurance company who issues the insurance
policy and agrees to pay for losses and provide
covered benefits.
Limits
The maximum amount of benefits the insurance
company agrees to pay under an insurance policy
in the event of a loss.
Medical Payments
Provides coverage for medical bills for people hurt
on your property or by your pet.
Modified Coverage Form (Form 8)
Provides coverage for older homes.
Non-Renewal
The termination of an insurance policy on its
annual anniversary date.
Peril
A type of covered loss such as hail or windstorm.
Personal Liability
Protects you, your relatives in the household and
residents in your household under the age of 21
if you are sued and found legally responsible for
injury or damage to their property. This coverage
also extends to students under the age of 24
enrolled full-time at school or college (with certain
exceptions).
Personal Property
Items you own that typically are found within
the dwelling or other structures such as furniture,
appliances, electronics, lawn equipment, clothing,
etc.
Policy
A contract that states the rights and duties of the
insurance company and the insured.
Premium
Price paid to the insurance company for an
insurance policy.
Producer (agent)
An individual or organization authorized to sell,
solicit, negotiate, and service insurance policies for
an insurance company.
Open Perils
There is coverage as long as the cause of the loss is
not specifically excluded.
Other Structures
Structures not attached to the dwelling. These
include detached garages, sheds, fences, guest
houses, etc.
Quotation or Quote
An estimate of the cost of insurance based on the
information supplied to the insurance producer
(agent) or company. This amount may change
depending upon findings during the underwriting
process.
Replacement Cost
The amount it would take to replace or rebuild
your home or repair damages with materials of
similar kind and quality without deducting for
depreciation.
Riders/Scheduled Personal Property Endorsement
This is purchased if you have items like jewelry,
expensive collections, cameras, etc. that would
exceed the amount your coverage your policy
offers.
Special Form (Form 3)
Covers damage to the dwelling, other structures,
personal property, personal liability, and medical
payments. The difference between the Broad Form
and the Special Form is that is that the Special Form
tells you specifically which perils it will not cover.
This form provides more coverage for the home and
other structures than the Broad Form.
Surcharge
An extra change applied to the premium by an
insurance company at renewal, usually applied as a
result of a claim.
Underwriting
The initial 60-day time frame wherein the company
processes and investigates the information provided
on the application. The results of this process
determine acceptability and the premium.
Unit Owners Form (Form 6)
This form is designed for condominium owners
and offers coverage similar to that provided to
homeowners with the Broad Form. This type
of policy insures the contents and property not
covered by the condominium association’s policy.
You must request and obtain the specific amount of
coverage you need.
15
Questions?
For more information on
home insurance, visit:
www.insurance.pa.gov
and click “home” under Coverage
or
call the department at
1-877-881-6388
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@PAInsuranceDept
Facebook.com/PAInsuranceDepartment
Rev. 4/2017
