Purchasing a home is the start of an exciting, but stressful, chapter in your life. Although most people assume that fire, flood, theft, and earthquakes will never happen to them, these disasters do occur ­– and they can destroy a home.

A homeowners insurance policy is highly personal based on your home — but there are a few must-have requirements across the board for any insurance company: in-depth coverage, affordable price, sterling financial reputation, and knowledgeable insurance agents. We found a handful of nationwide and regional insurance companies who are safe bets for homeowners insurance.

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The Best Homeowners Insurance in Maryland

Freshome’s Recommendations: AmicaState Farm, Liberty MutualSafecoGEICO.

To determine our top recommendations for Maryland homeowner’s insurance, we took a look at the top-rated providers in the country and narrowed that list down to the top three. Hours of research went into choosing the companies that provided the best customer satisfaction, customer service, prices, and policy offerings.

Our Quotes
Amica$1,881 per year
Liberty Mutual$1,637 per year
State Farm$1,022 per year

We used a real address and location to ballpark these quotes. The following quotes are for a single-family home with four bedrooms and two-and-a-half bathrooms with a $150,000 policy and a $2,000 deductible. Every quote was for an HO3 policy; in other words, a policy that covers the home against open perils and that covers the property against named perils.

Open Perils
An insurance policy that protects against open perils covers all sources of loss except those that are specifically excluded. This is the most common type of insurance policy purchased in the United States, and also the most desirable; in searching for an policy for your home, you should seriously consider an open perils policy.

Named Perils
An insurance policy that protects against named perils is the opposite of an open perils policy; a named perils policy protects against only items named within the policy itself. The most common named perils policies include coverage against the following.

  1. Theft
  2. Fire and lightning
  3. Explosions
  4. Smoke
  5. Freezing
  6. Vehicle damage
  7. Falling objects
  8. Volcanoes
  9. Windstorms and hail
  10. Riots and demonstrations
  11. Aircraft damage
  12. Vandalism and mischief
  13. Snow, sleet, and ice
  14. Damage due to bulging, tearing, shrinking, etc.
  15. Electrical damage from generators
  16. Water overflow

Next to no discounts were applied to the sample quotes in order to provide as fair an estimate as possible. Many insurance providers offer a number of discounts if you have a security system or Internet-connected smoke and fire alarms; there’s also a discount for bundling your homeowners insurance with your auto insurance. Examine all your options and look into the discounts and savings that may be available to you.

In order for us to recommend an insurance company, it had to meet strict criteria. Their J.D. Power overall satisfaction rating had to be higher than three stars, and every company had to have a financial strength rating of B+ or better from A.M. Best. In addition, each company had to have a high financial strength rating from either Moody’s or Standard & Poor’s.

These criteria guarantee that the company not only has enough funding to pay out claims (which in the event of a natural disaster, may come rapidly and in higher numbers than many companies are prepared for) but also a sense of financial reliability throughout the years. The first homeowners insurance company you sign on with will likely be the company you use the entire time you live in your home, so building a relationship based on dependence is important.

What You Should Know Before Getting a Quote

As stated before, all homeowners insurance policies should be at minimum an HO3 policy. Maryland residents should take care to consider region-specific concerns like hurricanes. While major hurricanes are relatively uncommon in the state, disaster-level events like Hurricane Sandy do occur. Seventeen hurricanes have hit Maryland since 2000, resulting in billions of dollars of damage to homes and properties.

When applying for a quote, seek first to obtain sufficient coverage for the replacement cost of your home. If you’re uncertain, call a contractor or appraiser and obtain a valuation of your home. Your home’s value is affected by a number of factors such as damage, recent upgrades (with kitchen renovations and bathrooms yielding the most increase), landscaping, and more. This can be difficult to estimate, which makes a professional quote all the more important.

Once you are certain your quote is for sufficient coverage, look for any discounts you may qualify for. Bundling home and auto insurance can result in a significant decrease in your premium costs (in our quotes, bundling with auto could save as much as 20 percent). The average cost of insuring a home in Maryland is $824 annually, compared to the national average of $923 annually.

Here are a few potential discounts for homeowners insurance:

  • Living inside a gated community
  • New wiring
  • New roofing with impact resistance
  • No prior insurance claims
  • Participating in an HOA
  • Recent renovations
  • If you’re a nonsmoker
  • If you are 55 or older
  • Interior gas and water sensors
  • Storm shutters
  • Smoke and burglar alarms

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Applying for a Quote

When you apply for a quote, make sure to have all of your home’s relevant information on-hand. This includes the year the house was built, whether the roofing is original or new, whether the home has any bay windows, if the garage is an attached or detached structure, the type of siding (whether brick, stucco, wood, etc.), and what sort of alarm systems are installed and whether they are monitored locally or off-site.

You should have all of your prior insurance information, as well. If this is your first time seeking home insurance, you’ll need your previous address in order to provide verification to the company. The insurance company may ask whether you are employed, a student, and other personal details to determine if you qualify for specific discounts.

State Farm

With the previously mentioned criteria (four-bedroom home, two-and-a-half baths, $150,000 in coverage, located in Salisbury), State Farm provided the lowest premium cost at just $1,022 annually or $85 per month. This included a deductible of $2,000, dwelling coverage of $150,000, and contents coverage of $112,500. No discounts were used for the test, which means homeowners could likely qualify for even lower rates.

Amica

I was unable to obtain an online quote from Amica, but the company kindly provided a quote over the phone. The premiums came in at $1,881 annually, but unlike other companies, Amica doesn’t offer monthly payments; instead, homeowners can set up a 10-month payment plan which, in this case, would equate to $181 per month. The cost was higher than expected, but I discovered this was due to a dwelling coverage limit of $342,000, a personal property coverage limit of $256,500, and a personal liability limit of $300,000.

Liberty Mutual

Liberty Mutual also did not provide the option for an online quote. However, for dwelling coverage of $370,000 I was quoted a premium of $1,637 annually or $136 monthly. This quote carried a deductible of $2,000, although in the case of a hurricane, the deductible would be equal to 2 percent of the dwelling coverage; in other words, $7,400.

Why are Maryland’s rates so average?

The average cost of homeowners insurance in Maryland is only $824 annually, or $69 per month. However, the cost is hugely dependent upon where in the state you live. The coastal portions of Maryland (Ocean City, Rockeville, Easton, etc.) have significantly higher annual premiums, with Ocean City having the highest at $1,766 annually — 43 percent higher than the Maryland average. This is due to the city’s proximity to the ocean and the increased likelihood they will be exposed to major storms, flooding, and other risks.

On the other hand, cities found on the far western edge of Maryland have far lower premiums. The city of Cumberland’s average homeowners insurance premium is only $649 per year, 48 percent lower than the state average. Because of western Maryland’s distance from the ocean, as well as the relative safety of the area, the likelihood of a disaster-level event is much lower.

FAQs

What are common coverage gaps?

Every policy will vary, but the most common coverage gaps in homeowners insurance include earthquake coverage, flooding due to a backed-up sump pump, required upgrades due to building code changes, and frozen pipes. In addition, if you bundle home and auto insurance through the same company, ensure you only have to pay one deductible if a disaster damages both items.

Think you don’t need earthquake coverage? Think again. Between 1993 and 2003, 14 earthquakes were reported within Maryland’s borders. While none registered high enough on the Richter scale to cause serious damage, they were a subtle reminder than the threat remains.

Another type of commonly overlooked insurance is vacancy insurance. According to Lisa Brady of Long & Foster Real Estate, “If you have a vacant home and something happens, you’re in a lot of trouble. A lot of sellers don’t know that.” If your home is going to be vacant for an extended period, make sure your policy covers that gap; otherwise, you may be invalidating your insurance during the period you’re out of your home.

What about flood insurance?

Flood insurance is often excluded from coverage. Those living in coastal areas or in places prone to flooding should double-check their coverage and ensure they are protected. Even those living outside of coastal areas can still be affected, particularly with Maryland’s cold climate; temperatures can plummet in winter. Frozen pipes and backed up sump pumps are commonly overlooked causes of flooding. If your homeowners insurance doesn’t cover flooding, it is relatively easy to add coverage through the National Flood Insurance Program.

What if the market value of my home drops?

Even if your home decreases in value, you shouldn’t reduce your coverage. Remember, your policy should cover the cost of a total replacement. Even if the value of your home has dropped, the cost of materials and labor has not.

How can I reduce my premium?

The cost of your premium will be dependent on a variety of factors, including the amount of coverage you have and the discounts you qualify for. However, if you opt for a higher deductible (such as $500 or $1,000), your premium costs will often be lower.

If your premiums are still higher than you’d like, you can reduce the amount of coverage in areas B and C, particularly if you don’t have any other structures on your property. Make sure you don’t reduce your coverage too much, however; many people underestimate the value of their personal belongings. Before you make the decision to reduce your area C coverage, perform a thorough inventory and valuation estimate of your belongings.

Take Action

Homeowners insurance is an absolutely vital part of home ownership. While insurance is not required by law, obtaining financing is almost impossible without it. Your premiums will vary based on your location within the state, but State Farm is likely the best national company for a prospective homeowner. That said, regional insurance companies can provide benefits that national companies cannot, such as location-dependent knowledge and attention. Don’t wait until a disaster strikes to learn about insurance; apply for quotes today and find out what you qualify for.

Freshome’s Top Recommendations: AmicaState Farm, Liberty MutualSafecoGEICO.

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

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