If you’re considering buying or building a home in Maryland, don’t forget to figure the annual premium for homeowners insurance as your totaling up expenses. High real estate costs and a generally high cost of living, especially in the Washington, DC suburbs and the cities of Annapolis and Baltimore, mean that this will not be an insignificant amount. Mortgate companies require you to have adequate homeowners insurance, and even if you don’t have a mortgage, it is wise to be covered against loss.

Before you commit yourself to an insurance policy whose premium can be over $800 per year on a home valued at $900,000, it pays to know what you’re getting, and more importantly, what you’re not getting.

Let’s start with what you don’t get – coverage of losses due to flood. Although large parts of Maryland are flood prone (flash flood alerts are commonplace during the summer months in the Washington suburbs of Montgomery and Prince George’s Counties, for instance), insurance companies do not provide flood damage coverage in their homeowners insurance policies. Flood and water damage is very important in coastal areas along the Atlantic and Chesapeake, especially during hurricane season. Such coverage must be obtained separately through the National Flood Insurance Program or from a company that specializes in flood coverage.

What you do get is coverage for damage to the dwelling (from everything other than water damage), loss or damage to personal property, loss of use of the dwelling (for up to 12 months), and personal injury liability.

Maryland requires employers to have Workers Compensation coverage for their employees, and this applies to domestic staff, gardeners, and even baby sitters. The personal liability and medical payments coverage of the average homeowner’s insurance policy does not provide payment for an employee covered by Workmen’s Compensation, which has to be purchased separately, but it does cover injuries to others on your property.

With housing prices in Maryland on the rebound, it is also a good idea to take another look at the amount of dwelling damage coverage you have. If it is the amount you decided upon when the house was bought or built, and your house is more than ten years old, you do not have nearly enough coverage. It’s also a good idea to review other coverage periodically to ensure you have enough to reflect the rising cost of living in Maryland, especially in the cities and the suburban areas around Washington, DC.