HARRISBURG, Pa. — Pennsylvania homeowners have more protection against having their homeowners’ insurance policies cancelled or non-renewed or having their rates raised when they file a claim than homeowners in 40 other states.
This is according to a report by the Rutgers Center for Risk and Responsibility at Rutgers Law School. Pennsylvania is one of only 10 states to receive a rating of four stars or better.
“This study validates Governor Wolf’s emphasis on consumer protection as the Insurance Department’s top priority,” Insurance Commissioner Teresa Miller said. “The study confirms that Pennsylvania laws and our department policies afford homeowners significant protection against being penalized for using the homeowners’ insurance they have paid for to protect their families.
“I am gratified this national study recognizes the job the Wolf Administration is doing to protect homeowners from unfair actions by insurers. Companies have a right to charge fair rates to cover claims and make a profit, but punishing people simply for using the coverage they need to protect their families and possessions is wrong, and is not permitted in Pennsylvania.”
The Rutgers study evaluated a practice called “use it and lose it.” The study looked at insurance laws and policies in all 50 states and the District of Columbia.
The criteria considered whether homeowners could have their policies cancelled or non-renewed, or have surcharges placed on them when a claim is filed.
The study additionally considered whether homeowners could be penalized for filing a claim even if the insurer paid no money, or for simply calling to inquire about whether a loss would be covered.
“Pennsylvania’s Unfair Insurance Practices Act prohibits insurers from cancelling or non-renewing a homeowner’s insurance policy simply for submitting a claim,” Commissioner Miller said. “Also, our department permits surcharges to be applied only when a claim results in the insurer paying for the loss, so a zero-dollar claim or an inquiry as to whether a loss is covered cannot be used to place a surcharge on the homeowner’s policy.”
Commissioner Miller noted claim surcharge plans must apply to all policyholders or all policyholders of the same class, and must be submitted to and approved by the Insurance Department prior to taking effect.
The department reviews these plans to make sure any surcharges do not result in rates that are excessive, inadequate or unfairly discriminatory. An insurer must notify homeowners that submitting claims can result in surcharges before the company begins applying surcharges.
“No one likes using insurance, because that means something bad has happened. But, people buy homeowners insurance to protect their families when something bad does happen, and in my view and that of Governor Wolf, these people shouldn’t be penalized for using the product for which they are paying hard-earned money,” Commissioner Miller said.
For information on homeowners’ insurance visit www.insurance.pa.gov. and click on the “Home” icon under Insurance Coverage Resources on the right side of the page.
Consumers can also file complaints by visiting the website, or calling 1-877-881-6388.
