Key Takeaways
- Pennsylvania does not mandate homeowners insurance by law, but mortgage lenders typically require it
- Pennsylvania FAIR Plan provides coverage for high-risk properties that cannot obtain coverage in the voluntary market
- Insurers must provide specific notice for cancellation or non-renewal of homeowners policies
- Pennsylvania law requires insurers to offer replacement cost coverage options
- Flood insurance is not included in standard homeowners policies and must be purchased separately
Pennsylvania Homeowners Insurance Requirements
Pennsylvania has specific property insurance regulations that protect consumers and ensure adequate coverage availability.
Voluntary vs. Required Coverage
Unlike auto insurance, Pennsylvania does not legally require homeowners insurance:
| Situation | Insurance Requirement |
|---|---|
| Own home outright | No legal requirement |
| Mortgage loan | Lender typically requires |
| Renting | Landlord may require renters insurance |
Note: While not legally mandated, virtually all mortgage lenders require homeowners insurance to protect their investment.
Pennsylvania FAIR Plan
The Pennsylvania FAIR Plan (Fair Access to Insurance Requirements) provides basic property insurance for high-risk properties:
What Is the FAIR Plan?
The Pennsylvania FAIR Plan is:
- A shared market mechanism for hard-to-place property risks
- Available when coverage cannot be obtained in the voluntary market
- Provides basic property coverage (not comprehensive homeowners)
- Operated by an association of insurers
What FAIR Plan Covers
| Coverage | Included |
|---|---|
| Fire and Lightning | Yes |
| Extended Coverage (windstorm, hail, etc.) | Yes |
| Vandalism and Malicious Mischief | Optional |
| Theft | Not covered |
| Liability | Not covered (separate policy needed) |
| Additional Living Expense | Limited |
When FAIR Plan Is Used
- Property located in high-risk areas
- Property has been declined by voluntary market insurers
- Property doesn't meet standard underwriting guidelines
- Urban areas with high loss history
- After major disasters when voluntary market tightens
Important: FAIR Plan is a last resort, not a first choice. It typically provides less coverage than voluntary market homeowners policies and requires separate liability coverage.
Applying for FAIR Plan
- Attempt to obtain coverage in voluntary market
- If declined, apply through the FAIR Plan
- Inspection may be required
- Must meet minimum eligibility requirements
- Coverage issued by the association
Cancellation and Non-Renewal Requirements
Pennsylvania has specific requirements for canceling or non-renewing property insurance:
Cancellation Notice Requirements
| Reason for Cancellation | Notice Required |
|---|---|
| Non-payment of premium | 15 days |
| Other reasons (first 60 days) | 15 days |
| Other reasons (after 60 days) | 30 days |
Non-Renewal Notice Requirements
| Timeframe | Requirement |
|---|---|
| Standard Non-Renewal | 60 days before expiration |
| Reason Required | Must provide specific reason |
Prohibited Cancellation Reasons
Pennsylvania prohibits cancellation or non-renewal based on:
- Filing a single claim (some protections)
- Age of the dwelling (with limitations)
- Location alone (with limitations)
Coverage Requirements
Pennsylvania has specific requirements for property insurance policies:
Replacement Cost
- Insurers must offer replacement cost coverage options
- Actual cash value coverage also available
- Policyholders must understand the difference
Standard Policy Provisions
Pennsylvania property policies must include:
- Clear statement of coverage limits
- Deductible amounts
- Exclusions and limitations
- Cancellation provisions
- Claims procedures
Flood Insurance
Standard property policies exclude flood damage:
Flood Coverage Options
| Option | Provider |
|---|---|
| NFIP (National Flood Insurance Program) | Federal program via insurers |
| Private Flood Insurance | Available from some carriers |
Requirements
- Properties in Special Flood Hazard Areas with federally-backed mortgages must carry flood insurance
- Agents should discuss flood coverage with all property insurance clients
- Standard homeowners policies do NOT cover flood
How many days notice must a Pennsylvania insurer provide for non-renewal of a homeowners policy?
What does the Pennsylvania FAIR Plan provide?