But Hunter does agree that homeowners may not be up to date on the estimated cost of rebuilding, in part because they haven't adjusted their coverage to reflect renovations and because construction costs have jumped.
Standard policies usually include inflation indexes, but Hunter warned: "They can be inaccurate. Or you could be in a pocket where costs are going up faster" than the insurers' estimating software indicates.
For More Information
Some useful Web sites on homeowners insurance:
• www.mdinsurance.state.md.us from the Maryland Insurance Administration. Click on "Consumer Information" for a consumer's guide and a comparison guide of rates in 10 different Zip codes in the state.
• www.state.va.us/scc/division/boi from the Virginia Bureau of Insurance, a division of the Virginia State Corporation Commission. Click on "Consumer," then under "How can we help you?", click "Want one of our publications?" for a guide to homeowners/renters insurance.
• www.disr.washingtondc.gov from the D.C. Department of Insurance, Securities and Banking. Click on "Insurance Industry" for consumer information.
• www.iii.orgfrom the Insurance Information Institute. Click on the left side on "home." The site also has information in Spanish.
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How to Keep Premiums Low
The Insurance Information Institute and the Consumer Federation of America offer these suggestions on how to keep premiums low:
• Shop around. Check at least three to five reputable companies for comparable coverage. "People can save $100 on average if they spend an hour" shopping around, said J. Robert Hunter of the Consumer Federation. The savings are based on focus groups.
• Make sure your credit report is accurate . In most states, insurance companies can use your credit score to deny coverage, set rates or offer discounts. Maryland bans the use of credit scores in denying insurance.
• Increase the deductible. If the deductible is increased from $250 to $1,000, you could save at least 25 percent in annual premiums.
• Ask companies if you will get a discount if you buy auto and life insurance from them, too. But check both the combined costs of the premiums and the costs of individual products from different companies.
• Add security devices, sprinkler systems and fire alarms. Insurers offer discounts for such items.
• Check whether your insurer charges more if you have a dog or a particular breed of dog. Because dog bites now account for almost a quarter of all homeowners insurance liability claims -- about $345.5 million annually -- some insurers are clamping down. Some require dog owners to sign liability waivers for dog bites, while others charge more for owners of breeds such as pit bulls and Rottweilers. Others won't write insurance for dog owners at all.)
Here are the three most important questions to ask your agent, said Carolyn Gorman, vice president of the Insurance Information Institute:
• If my house is destroyed, do I have enough insurance to rebuild it?
• If my house is destroyed, do I have enough insurance to replace my personal property?
• Do I have enough insurance to protect my assets if I'm sued?
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Consultant Wells takes issue with Hunter's belief that homeowners in most areas don't need 100 percent coverage. "I personally think that's a shortsighted view," Wells said. "A lot of problems and disasters occur where they weren't expected. . . . And you don't want to be the one that has one."
The experts agree that the amount of coverage should never be based on the market value of the property. Market value includes the value of the land under the house, which in some neighborhoods can be much more than the value of the structure. If the land and structure aren't valued separately, that can lead to having more insurance than necessary. To double-check your insurer's estimated value, Gorman suggests hiring an independent appraiser, which costs about $300.
The Consumer Federation's Hunter said he usually just "calls a friend who's a builder." In exchange for dinner, the friend tells him the going construction cost per square foot.
Gorman and Hunter advise consumers to shop around. The federation has found through focus groups that "spending an average of an hour" in comparison shopping can save $100 for the average homeowner.
Gorman also suggests raising the deductible, or the amount that the homeowner agrees to pay on any loss. She cites rates provided by her State Farm Insurance agent.
"If you have a $375,000 brick home in the District, with $500,000 in liability coverage, $2,000 for medical payments to others and coverage for sewer and drain backups, your premium would be $1,400 if you had a $500 deductible, and $1,177 if you had a $1,000 deductible," Gorman said.
A similar house in Montgomery County would have premiums of $1,340 and $1,127. In Prince George's County, paying the higher deductible would lower the premium to $1,559 from $1,854. In Arlington, the premium would drop to $1,053 from $1,224.
Consumer advocates say the biggest insurance issues in recent years have been over a run of startling rate increases and over insurers' moves to refuse to renew policies with those who have filed multiple claims.
In 2001, when falling stock prices were slamming their investment portfolios and the industry was still reeling from several years of devastating and expensive hurricanes and fires, insurers tightened up on their underwriting standards, turning away longtime customers and refusing to take on new policyholders in some areas.
Some companies began to refuse to renew policies for longtime customers if they had filed more than two or three claims in three years. Most upped their rates by double-digit percentages annually from 2001 to 2003. In some cases, premiums have doubled in the past five years.
Consumer advocates petitioned regulators to limit the rate hikes, but insurers contended that they could no longer afford to carry homeowners insurance as a "loss leader" because they were paying out more than $1.17 in claims for every dollar in premiums.
Rates nationwide are expected to rise only 2.8 percent this year, the smallest increase in five years, according to the Insurance Information Institute.
Some homeowners are still furious, even though the rate hikes are moderating. Sid Davis, a Bethesda resident for 35 years, said he has been preoccupied with how much his premium has jumped rather than whether he has the appropriate amount of coverage.
"It could be that I'm underinsured. I haven't taken a look at that lately," said Davis, who recently contacted The Washington Post about what he called "outrageous increases."
"I know my real estate value has gone up," he said. "But my annual premium in 2001 was $729, and it went up $50 to $779 in 2002. Then in 2003, it went to $1,331, a 70.86 percent increase."
The 2004 premium, he said, "jumped to $1,636."
"It could be that the premium amount is now right" for the 5,000-square-foot home and that in the past he was getting a deal, Davis said. And it could be "that I don't have enough coverage. But what upsets me is the percentage of increase. In my judgment it was out of line, too rapid."
