Reduce property hazards to help avoid insurance coverage loss

Homeowners run the risk of losing their homeowners insurance coverage when they don’t adhere to reasonable requests by insurers to make their properties safer, according to Pennsylvania Insurance Department (PID) Commissioner Teresa Miller.

“A review of consumer complaints received by the insurance department found that some consumers have had their homeowners’ insurance cancelled or non-renewed after not taking action when their insurance company identified a hazard on their property,” Miller said. “I want all homeowners to understand that they need to respond to these requests so they don’t risk losing the coverage they need to protect their homes and that PID can provide assistance in these matters.”

Pennsylvania Association of Realtors® Director of Law and Policy Hank Lerner said, “Over the past several years insurer-required repairs have become an issue for buyers. In some cases buyers would have their own inspections and negotiate acceptable repairs, then at some point near the end of the transaction the insurer would make demands or even send in their own inspectors.”

Lerner said issues with some roofs, chimneys, electrical service and general safety items like sidewalks could make it more difficult to get homeowners’ insurance. “The PAR Agreement of Sale has a provision that covers insurer-requested inspections and repairs so our members are able to advise their clients about these potential issues as part of the buying process,” he said, “but that doesn’t cover insurer demands that might be made after the new owner has moved in.”

By ensuring that homeowners understand their rights and responsibilities, Miller believes the department can help consumers avoid most policy cancellations and non-renewals. When considering cancellation and non-renewal appeals, the department ensures the insurer’s requests are reasonable and the homeowner was given sufficient time to make repairs.  But insurance companies do have a right to manage the risks they insure on a property, within reason. Miller said insurance companies may ask homeowners to take reasonable action to lower risks on a property when issuing a policy or if a change to that property substantially increases risk. Homeowners can appeal an insurance cancellation or non-renewal to the insurance department.

Miller cited an example of a homeowner installing a deck with portions of the structure significantly above the surrounding ground level. An insurer may require the homeowner to put up a railing around the deck to lower the chances of a fall or injury. However, the insurer must allow a reasonable amount of time for this work to be done and take into consideration circumstances such as the time of the year when the request is made, as this type of work can be more difficult in winter months. Other actions an insurer could require include fixing an uneven sidewalk or removing large tree branches which could strike and damage a home.

“The homeowner bears the responsibility to take reasonable action to lower the risk the insurer has on a property. A homeowner’s failure to take such reasonable action can lead to an insurer canceling or non-renewing a policy on that property,” Miller said.

For more information on homeowners’ insurance, visit the Department of Insurance website or call the Bureau of Consumer Services at 877-881-6388.