That strikes Weisbart as a short-sighted solution. Although it might seem like a good idea to keep the premium down, when a home is destroyed, most homeowners see things differently and would want to be compensated for its full value, he said.

"If your entire house burns down, most people in that situation are not going to be rational economic actors," Weisbart said.

steve.kilar@baltsun.com

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Shopping for insurance



Prepare to compare. Homeowners should prepare for their comparison shopping phone calls with insurers. Be ready with information about the home, including the type of construction and the distance to fire services. Give each insurer the same information, so that true comparisons can be made between policies.

Discounts. It never hurts to ask what discounts an insurer offers. Many insurers offer a markdown to consumers who bundle several types of policies. Installing smoke alarms or a security system might lead to a premium reduction. There may also be discounts for seniors, nonsmokers and membership in some associations.

Deductibles. Most policies involve more than one deductible. Hurricane and wind losses, for instance, might have a different deductible than fire loss. As storms become a greater threat in the Mid-Atlantic, it is more important for homeowners to understand how these varying deductibles will be applied.

Credit history. Insurers offering homeowners policies in Maryland are not allowed to take the applicant's credit history into account when pricing a policy or determining whether a policy should be canceled or renewed.

Loss history. Insurers may look at two types of loss history when pricing a homeowners policy. First, they may see if the applicant has filed homeowners insurance claims — on any property. Second, they may review whether prior owners have filed insurance claims on the applicant's home. An applicant can confirm the home's loss history by obtaining a free report from companies such as LexisNexis Risk Solutions and Insurance Services Office Inc.

Source: Maryland Insurance Administration