Home insurance is one of the most important protections you can have as a homeowner. But not every policy offers the same coverage, and choosing insurance based on price alone can leave you with expensive surprises later.
This is especially important if you are getting ready to buy a home in Philadelphia. Insurance costs and coverage can vary depending on the property, its age, location, condition, rebuilding costs, and other factors.
As Philadelphia realtors, we want buyers and homeowners to understand the basics so they know what questions to ask their insurance agent. We also spoke with Philadelphia insurance specialist John Dwyer about some of the most common home insurance mistakes homeowners make.
1. Choosing insurance based on price alone
The cheapest policy is not always the best policy.
A lower premium may come with higher deductibles, lower coverage limits, or important exclusions.
When comparing policies, look at:
- Coverage limits
- Deductibles
- Exclusions
- Replacement cost
- Liability coverage
- Optional coverage such as water backup
- The insurer’s claims reputation and financial strength
The Pennsylvania Insurance Department recommends comparing both price and coverage from several companies.
An independent insurance agent can also help compare multiple options.
2. Assuming homeowners insurance covers everything
Standard homeowners insurance does not cover every type of damage.
Most policies may cover things like fire, wind, theft, and falling objects, depending on the policy. However, they generally do not cover normal wear and tear, neglected maintenance, or flooding.
Flooding is especially important to understand in Philadelphia. Standard homeowners insurance does not cover flood damage.
As of 2026, eligible National Flood Insurance Program policies in Philadelphia receive a 15% discount because the city participates in FEMA’s Community Rating System.
You should also ask about sewer or water backup coverage, which may require an additional endorsement.
3. Not understanding your deductible
Your deductible is the amount you generally pay before insurance begins paying its share of a covered claim.
A higher deductible can lower your premium, but it also means paying more out of pocket when something happens.
Some policies may also have separate deductibles for risks such as wind or hail. These can sometimes be based on a percentage of your home’s insured value.
Before choosing a policy, ask exactly how much you would have to pay after a major claim.
4. Assuming your lender’s insurance requirements are enough
Meeting your mortgage lender’s insurance requirements does not always mean you have all the coverage you need.
Your lender is mainly concerned with protecting the property securing the mortgage. You should also review your own needs, including:
- Personal property
- Liability coverage
- Flood insurance
- Water backup
- Loss-of-use coverage
- Coverage for valuables
It is also important to understand replacement cost versus market value.
The price of a home in the Philadelphia real estate market is not necessarily the same as what it would cost to rebuild after a major loss. Construction labor and materials can make rebuilding costs very different from the home’s sale price.
Even after paying off your mortgage, keeping homeowners insurance can protect you from major financial losses.
5. Not reviewing your policy every year
Homeowners should review their insurance coverage at least once a year and after major changes to the home.
Contact your insurance agent if you:
- Renovate or add onto the home
- Finish a basement
- Add a pool or solar panels
- Buy expensive jewelry, artwork, or other valuables
It is also smart to keep a home inventory with photos or videos of your belongings. This can make filing a claim easier after a major loss.
6. Overlooking liability coverage
Home insurance also helps protect you if someone is injured on your property and you are legally responsible.
Many policies start with around $100,000 in liability coverage, but some homeowners may want $300,000 to $500,000 or more depending on their assets and risks.
Higher limits may be especially worth discussing if you have a pool, own a dog, frequently host guests, or have significant assets.
An umbrella policy can provide additional liability protection.
What should you compare when shopping for home insurance?
Do not look at the premium alone. Ask about:
- Replacement cost versus actual cash value
- Deductibles
- Liability limits
- Flood and water-backup coverage
- Loss-of-use coverage
- Discounts for bundling home and auto insurance
- Discounts for alarms, smoke detectors, and other safety features
A local independent insurance agent may also be helpful when comparing coverage for Philadelphia rowhomes, older houses, condos, renovated homes, and newer construction.
Should you get an insurance quote before buying a home?
Yes. It is a good idea to get an insurance estimate before you finalize your purchase.
If you are looking through Philadelphia homes sale listings, insurance should be part of your budget along with your mortgage, property taxes, utilities, and maintenance.
Getting a quote early can help you avoid discovering just before closing that a particular home costs more to insure than expected.
Experienced Philadelphia realtors can help you understand the property and buying process, while a licensed insurance professional can help you choose the right coverage.
The bottom line
Good home insurance is about more than finding the lowest price. Make sure you understand what your policy covers, what it excludes, how much your deductible is, and whether your coverage still fits your needs.
If you plan to buy a home in Philadelphia, start looking at insurance before closing so you can build a more realistic budget and avoid surprises after you get the keys.
*This article is for general informational purposes and is not insurance, legal, or financial advice. Coverage, exclusions, deductibles, and eligibility vary by insurer and property.