Homeowners Insurance in Maryland

Maryland has a rich American history, and neighbors our nation's capital, Washington, D.C. Much of the state includes coastline, which could mean flooding and badly damaged or destroyed property. Situated in the Mid-Atlantic region, Maryland is prone to frequent hurricanes and brutal winter storms, causing millions in property damage. Maryland is considered one of the safest states, with the most damage coming from winter storms and floods. Since 1953, Maryland has had 32 federally declared natural disasters, and the rate of disaster per 1 million people is 5.16, which is low.

Along with claims for damage due to hurricanes, hail, flooding, and winter storms, Maryland property owners also file home insurance claims for theft, vandalism, other types of property damage, and liability issues.

Although states don't require any home insurance, you should know what other requirements to comply with. Experts recommend that everyone have some coverage. If you take out money to buy a house in Maryland, your lender will require that you purchase and keep homeowners insurance on the property until you pay off the loan. They will also dictate specific levels of coverage.

The national average for homeowners insurance is $2,511 per year, but residents in Maryland pay an average of $1,916 per year or $160 per month for coverage.

Insurance providers choose which states to operate in and what types of coverage they want to provide. Maryland is a fairly safe state, and plenty of carriers offer various types of coverage. The following are the types of coverage available in Maryland.

Although Maryland does not have a lot of flooding, it is a concern for those living on the seacoast. You may consider special flood insurance or an umbrella policy to pick up where others leave off.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S.

Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on the options you choose, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

It's no secret that homeowners insurance is expensive, and rates continue to climb as global warming creates more frequent natural disasters. More frequent hurricanes, tornadoes, and harsh winter storms increase damage, claims, and insurer losses.

Over the past five years, average rates have spiked by 34% and as much as 60% in some areas. From 2018 to 2023, Maryland rates have increased by 32.1%. The homeowners insurance crisis makes it more difficult for residents to get the coverage they need to protect their homes.

The brunt of Maryland's home insurance claims comes from winter storms, ice damage, heavy snow, and windstorms like hurricanes. Some claims also come from flooding and water damage. From 2016 to 2020, an average property damage claim cost insurers $13,962. Thirty-four percent of all claims were due to hail damage. A typical hail or wind claim averages $11,695 per incident. Water damage claims tend to average $11,650/per.

In 2023, Maryland had only two tornadoes and 117 wildfires, causing 3,139 acres of damage. From 1980 to 2024, Maryland had 80 billion-dollar disasters. During 2015 and 2019, Maryland insurance providers incurred $1,028,328,600 in losses from claims.

With the price of home insurance rising, homeowners must do everything possible to cut costs. The first step is knowing what factors most impact the price of home insurance. The following items affect how home insurance is priced.

Some ways to save on insurance rates in Maryland are:

• Shop Around: Shop around and get multiple quotes before applying. Ask for recommendations from family, friends, and associates.
• Improve Your Credit: Boost your credit score and keep it high to earn lower insurance rates.
• Remove Risks: Get rid of risky items and alert your insurance agent so they can adjust your rates.
• Ask for Discounts: Ask your provider for discounts that apply to you.
• Increase Your Deductible: Increase your deductible as much as possible to lower your rates.
• Bundle Policies: Bundle your home and auto insurance policies together to get a break on your premiums.
• Beef Up Security: Install a security system with monitoring devices that also alert the police and emergency services for discounts.
• Make Your Home Storm-Ready: Install hurricane shutters, shatterproof windows, and a stronger roof to get lower rates on your home insurance.
• Don't File Small Claims: Hold off on filing claims for small stuff. Every filed claim will affect your rates.

Maryland property owners purchase home insurance to protect their homes against covered perils. If a storm damages their house, the insurance company will pay to repair or rebuild it, restoring it back to normal. Along with protecting the house's structure, home insurance also includes liability protection against lawsuits, medical payments, personal property coverage, and ALE.

You can purchase a policy easily in a few different ways. You can find a local agent and work with them to help you decide what types and how much coverage you need. You can also do that yourself using one of the many insurance calculators online. Another option is to apply through a company's website or call their 800 number.

Some typical home insurance discounts include:

• Loyalty Discount: Remain a loyal customer for many years, and your provider may discount your rates.
• Senior Discount: Some firms offer discounts to senior citizens.
• Vet or Military Discount: Most providers offer discounts to active military personnel or veterans.
• Non-smoker Discount: If you are a non-smoker, you reduce your risk of fire and earn yourself a discount.
• No-Claims Discount: Remain claims-free for as long as possible and earn discounts on your rates.
• Bundling Discount: Bundle multiple policies, and you can earn discounts.
• Paperless Discount: Go paperless, and your provider may discount your premiums.
• Autopay Discount: Most carriers offer a small discount for customers who sign up for auto payments.
• Fire-Safety Discount: Install sprinklers, smoke alarms, and fire extinguishers to save on home insurance.
• Home-Security Discount: Install a home security system to keep burglars or vandals at bay, and your provider may reward you with a discount.
• Green Discounts: Your insurer may discount your rates when you purchase certain environmentally friendly appliances or building materials.

Common Rates Offer by Homeowners Insurance Firms

New homes cost less to insure and rebuild. In some cases, new homeowners can save up to 40% less than property owners with older homes. The average rate for insurance on a new home in Maryland is $1,597 per year or $133 per month. However, your price will vary based on your customer profile (age, credit score, size/condition/age of the home, etc.). Bundling your home and auto insurance together could save you up to 18%.

Top 10 Home Insurance Firms in Maryland and Average New Home Savings

Home renovations can enrich your life and spruce up your home, but they can also impact your home insurance dramatically. Some upgrades increase your rates by adding value or risk. Others lower your premiums by making your home safer or decreasing risk. There are a few upgrades that cancel each other out by doing both.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Increasing Space: Anytime you increase your square footage, you add value and size to your home. More space or value means higher home insurance premiums.
• Adding a Fireplace: A fireplace is a desirable feature that adds resale value, but it also increases your risk of fire and will increase your insurance rates.
• Luxury Appliances: Luxury appliances and fixtures can add elegance to your home, but they are also more expensive to replace, and your insurance coverage will need to increase (meaning higher rates) to cover that.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• Adding a Sump Pump & Water Alarms: Water damage is among the most common and costly perils. Installing a sump pump to remove excess water from your basement and water alarms to avoid flooding and damage could decrease your rates.
• Replacing Your Roof: Replacing your roof is one of the best ways to save money. Roof damage is common, and a stronger roof can prevent it.
• Install Storm Windows: Storm and shatterproof windows are meant to withstand storms without breaking, meaning fewer claims and lower rates.

Siding can lower your rates if you install storm-resistant materials. But if you use expensive, high-quality siding, your rates may go up instead.

Home insurance does not pay for upgrades and renovations unless they are performed due to a covered peril. It only pays for damage caused by a weather event, theft, vandalism, or other type of property damage. However, during renovations, if someone gets hurt or theft occurs, those are covered by home insurance.

You should always consult your insurance agent before performing any work. They can instruct you on how to proceed and counsel you on how your insurance, including your rates, may need to change.

Maryland residents who rent homes (condos, apartments, and houses) also need homeowners insurance, but a specific type. Renters insurance includes no dwelling coverage, so no structural elements are covered. That is the responsibility of the landlord. The primary purpose of renters insurance is to protect all your belongings. Most policies also include liability, medical payments, and loss of use coverage. Some covered perils are:

Renters insurance pays to replace things like clothing, furniture, electronics, small appliances, bedding, bath items, and sports equipment.

When pricing home insurance, providers use three main factors:

The average price for renters insurance in Maryland is $17.39/month, which is higher than many other states and higher than the national average of $14.27/month.

Condo owners also need homeowners insurance. Condo insurance works slightly differently than homeowners. For starters, the dwelling coverage only covers the interior of the unit. Condo associations purchase a master policy, which includes special dwelling coverage that will rebuild the building after a covered event, like a fire. However, it will only restore the building to its original condition when it was first built. Since most condo owners upgrade things like flooring, appliances, kitchens, and baths, those items are not covered under the master policy. That is where condo insurance comes in and restores it back to its most current condition with all the upgrades.

Renters insurance does not cover dwellings, but condo insurance does, but it only covers the interior. Additionally, the liability portion of condo insurance only works if the person is injured inside the unit, not on common grounds.

Condo insurance includes "walls-in" dwelling coverage, personal property, liability, medical payments, loss assessment, and loss of use coverage. Some covered perils are fires, windstorms, and theft. Some things that are covered under condo insurance include:

• Furniture
• Appliances
• Interior Walls
• Flooring
• Cabinets
• Countertops
• Light Fixtures
• Wiring
• Plumbing
• Personal Belongings

The average rate for condo insurance in Maryland is $642/year or $53/month with a $1,000 deductible, $60,000 in personal property coverage, and $300,000 liability coverage.

You can save on condo insurance by doing the following:

• Raise Your Deductible
• Improve Your Credit
• Change Your Coverage
• Shop Around for Rates
• Opt-in for Paperless Statements and Autopay
• Bundle Your Home and Auto Policies
• Ask for Discounts
• Improve Your Home
• Avoid Small Claims
• Reduce Risks

In Maryland, the homeowners insurance industry has experienced steady declines in profitability for the past ten years. After a huge loss in 2022, insurers barely broke even in 2023. In 18 U.S. states, insurance providers have seen massive losses to the point that many of them have stopped offering coverage in some areas, limited coverage, or dropped customers. This continued trend will result in losses in Maryland and affect available coverage and competition.

Maryland experiences severe winter storms, hurricanes, wildfires, and floods. All of these perils result in huge claims and insurance carrier losses. As global warming continues to cause turbulent weather, insurance markets will slowly narrow, and residents will find it challenging to get coverage.

Regulating the insurance industry falls to each individual state. These agencies monitor providers and their rates, ensuring they treat customers fairly, ethically, and legally. They also field customer complaints, perform investigations, and sanction the guilty. In Maryland, that agency is the Maryland Insurance Administration, located at 200 St. Paul Place, Suite 2700, Baltimore, MD 21202.