Great Maryland Homeowners Insurance Rates

06 Feb
Classic Circa 1990’s home in Chesapeake City, Maryland.

If you have recently paid off your mortgage and are considering dropping your homeowners insurance to save some money we highly recommend you reconsider. Going without insurance can be a major risk if your home is hit by a storm or fire. Without the protection of insurance you will be on the hook for the cost to repair or rebuild your home. You will also have to cover the costs of replacing all of your destroyed possessions.

Lenders require anyone carrying a mortgage to carry homeowners insurance to make sure that their investment in your home is fully protected. They know, from experience, that severe weather, fire or other perils can quickly damage or even destroy a home and if that happens, they need insurance to help cover the cost of rebuilding or repairing. Fortunately, most homeowners agree with this requirement. According to data from the insurance information Institute (III), roughly 98% of homeowners with a mortgage carry homeowners insurance. 

However, once you have paid off your mortgage and own your home free and clear it is your decision whether to dump your homeowners policy. While saving a bit of money is always welcome, going without the protection of insurance can be a huge financial risk. Statistics from the III show that only 3% of homeowners across the country have dropped all homeowners coverage. These people tend to fall into two categories, those who are wealthy enough to self-insure their own properties and those who can simply not afford coverage.

Luckily, homeowners insurance is extremely affordable and Maryland. ValuePenguin found that the average premium for homeowners insurance in Maryland is $942, which is a whopping 13% below the national average. Prices can be much higher if you live in certain neighborhoods in Baltimore or near the water in cities such as Easton, Annapolis or St. Mary’s City

If you are in a position to go insurance free and are thinking about dropping your coverage we highly recommend that you take a breath to carefully consider this decision and the risk that it brings. Below we take a look at the pros and cons of dropping homeowners protection.

The Only Real Pro is Saving Money

The only real reason to drop your coverage is saving a bit of money but this brings a lot of risk.

Saving Money: Getting rid of your monthly payment is absolutely a pro but it also increases your risk dramatically.

If you are serious about dropping your coverage it’s important to remember that if your home is seriously damaged or destroyed the cost to repair or rebuild it will fall entirely to you. It’s not only damage to your home that you have to worry about, if a person is injured on your property you could end up being responsible for their medical and legal bills. Unless you can cover these types of expenses easily you should absolutely have a homeowners insurance policy.

While hurricanes rarely make landfall in Maryland, we are no stranger to severe weather and if you have dropped your homeowners insurance all of the cost related to repairing or rebuilding your home and replacing all of your possessions will now be your responsibility. These costs can quickly spiral out of control and bankrupt most people.

Reasons to Keep Your Coverage Are Numerous

There are a number of reasons for keeping homeowners insurance in place. 

Rebuilding and Repair Costs:This is probably the biggest reason you should keep a homeowners insurance policy in place. If your home is severely damaged or destroyed and you are not carrying a homeowners policy it will be up to you and your savings account to cover the cost of fixing or rebuilding your entire home. If you cannot easily cover these types of costs we highly recommend keeping a policy in place. 

It’s not just residents that live near the water who need to be concerned about their home being damaged or destroyed. Even if you live inland in cities such as Westminster, Rockville or Frederick severe weather, lightning strikes or even a fire can quickly damage or destroy your home. If you are uninsured all of the cost to repair your home and replace your possessions will fall to you. 

According to Zillow data, the median home price in Maryland is $287,800 but prices can be much higher in certain cities. If you decide to go without insurance you will be covering that $287,000 (or much more depending on your home) to rebuild or repair your home if it is destroyed by a disaster. In addition, you will have to cover the cost of replacing all of your possessions. These kinds of expenses can put all of your assets at risk including retirement savings. 

It’s important to remember that homeowners insurance protects all detached structures on your property. If you have a barn, shed, detached garage or other outbuildings these will all be protected by your homeowners insurance policy. It should be noted that there can be coverage caps on this type of protection so check with your agent about specific restrictions on your policy. 

Liability Risks Can Be Major: This is another major risk you should be aware of if you decide to drop your insurance coverage. The liability portion of your homeowners insurance policy helps cover the cost of medical and legal bills if a person is injured on your property up to your coverage limits. If you are living without insurance these types of bills will be your responsibility.

Medical costs can quickly spiral into the unaffordable category, especially if the injury is serious. In addition to medical bills you may end up being sued and if that happens all of the legal bills and any settlements or judgments will be your responsibility. Legal bills and judgments can end up in the million-dollar range if the injury is serious. These types of costs not only put your home at risk but all of your other assets including retirement savings and any other assets you have acquired over your lifetime.

If you are absolutely determined to drop your homeowners coverage, we highly recommend that you carry an umbrella policy to address your liability risk.

Living Expenses Are Covered: A standard homeowners policy also comes with cost-of-living protection. This portion of your policy helps pay for your day-to-day living expenses if your home is deemed unlivable after damage from a covered peril.This coverage will reimburse you for hotel bills, restaurant meals and other daily expenses such as laundry. If you are out of your home for an extended period of time this coverage can be very useful.

Your Possessions Are Expensive to Replace: This is another huge advantage of a homeowners policy. Over your lifetime you have probably acquired quite a few possessions and replacing everything all at once can be very expensive. Take a few minutes to look around your home and do a quick calculation to replace everything you see. If you cannot easily afford this cost you should have a homeowners insurance policy in place.

Crime rates vary dramatically across the state but according to Neighborhood Scout, Maryland residents have a 1 in 45 chance of being the victim of a property crime. This translates into 23,508 burglaries year.

You should be aware that most standard homeowner insurance policies do have a coverage cap when it comes to high-value items. The cap will vary by insurer but $1,500 is a fairly common number. This coverage cap applies to items such as collectibles, jewelry, artwork, and even wine or cigar collections. If you have high value items worth more than $1,500 you may need a rider to fully protect your property

A Few Homeowner Insurance Tips

Here are a few tips about homeowners coverage and a couple of tricks to lower your premium:

Flood and Earthquake Damage are Not Covered: A standard homeowners policy does not cover damage that is caused by flooding or earthquakes. If you live in a high-risk area for flood or earthquake damage you will need a separate policy to help cover those risks. Flood insurance can be expensive but if you live in an area where flooding is a possibility you should absolutely have a policy in place to protect your home.

Raise Your Deductible: If you can afford to double your deductible this is a great way to lower your premium. Doubling your deductible should result in a discount of 10 to 20 percent. Always choose a deductible that you can easily afford in the event you have to make a claim on your policy.

Discounts Are Important: Insurance companies offer tons of different discounts and making sure that you are giving all the discounts you are entitled to receive will help lower your premium. Ask your agent to do a discount review on your policy to make sure that all Maryland home insurance discounts and credits are being applied.

Shop Your Policy Around: Probably the best way to lower your insurance costs is to shop your policy around. Insurers rate risk differently which can result in dramatic differences in policy quotes. We recommend shopping your coverage on a yearly basis and always make sure you’re comparing apples to apples when it comes to coverage levels and deductibles. is happy to help you compare up to 12 rates and coverage options. If we can help you save money, while also improving your coverage, please click here to get free online Maryland home insurance quotes now.

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