The Costliest Mistake Group Homes Make With Property Insurance in Maryland

If you operate a group home or residential program for individuals with intellectual and developmental disabilities (IDD) in Maryland, let me tell you something up front: your property insurance needs are not one-size-fits-all. Some of you rent, some of you own, and for some of you, it's a mix of both.

I’ve worked with enough providers to know that the wrong insurance setup doesn’t just cost you money—it can jeopardize your mission. If the insurance is put together incorrectly, it can lead to denied claims

In this post, I’m going to walk you through how to protect your properties the right way, avoid costly gaps, and build a program that actually works when it matters most.

Insuring Group Home Buildings in Maryland: What You Need to Know

Let’s talk about the most obvious thing first: the buildings. If you own the properties where you operate, or if you’re required by contract to insure them, then this is non-negotiable. I’ve seen everything from large apartment-style setups to single-family homes being used for residential services. They all need to be insured.

But there are several places where this gets messed up. First, the valuation of the buildings. Your insurance coverage should be based on how much it would cost to rebuild the structure—not how much you could sell it for. If you’ve got a townhome in Hagerstown, it might sell for $100,000. Move that exact building to Washington, DC, and you’re looking at a price tag that’s ten times higher. But the cost to rebuild it? That doesn’t change much, outside of slight differences in labor and material costs.

So how do you figure out the right number? Ask your broker to use a replacement cost estimator. It’s going to ask things like square footage, construction materials, and occupancy. That’s the number you want to insure—not a Zillow estimate.

The second place that gets messed up is the name on this policy.

Here’s the way I explain it – “Insurance Follows Ownership”.  The person or entity who owns the building needs to insure it.

With group homes, I commonly see the owner buy the building in their personal name, then insure it with a policy that only lists the business name.  There are several problems with this: first, the business can only insure what it owns or what it is required to insure by contract.  Second, the owner created this business entity to protect themselves from lawsuits, and now they’re putting their personal name on the building. 

This same problem can happen in reverse – the business owns the building and then the owners insures it under their personal name.

Names are important.  Make sure to get them right.

Contents Coverage for Group Homes: What’s Included and How to Calculate It

After the building, you’ve got what’s inside—your contents. If it’s an office building, that’s desks, chairs, computers. If it’s a group home, you’re looking at beds, couches, TVs, kitchen appliances, and more.

Here’s a simple trick: flip the building upside down in your mind. Everything that would fall out? That’s contents.

A decent rule of thumb is 10–15% of your building’s insured value. But honestly, the best way to know what you need is to take a full inventory. This isn’t just helpful for picking your limits—it’s critical during a claim. If a fire hits and your adjuster asks, “What did you lose?” and you can’t answer that clearly, you’re going to be disappointed by the payout. Guaranteed.

Why Business Income Insurance Matters for Maryland Group Homes

Now let’s shift gears a little. I’m not talking about physical buildings or furniture anymore—I’m talking about your revenue and ongoing expenses.

Let’s say you’ve got a fire in one of your group homes. Those residents need to go somewhere else. You may need to pay staff overtime to coordinate transitions or help transport them. That house is out of commission. You may lose clients. Your revenue will take a hit.  At the same time, your expenses will increase to offer the same services that you were offering before.

All of that adds up—fast. Business income and extra expense coverage is designed to protect you in exactly these kinds of situations. But here’s what makes IDD group homes unique: you can’t just move to a new space overnight. You’ve got licensing, inspections, setup. It takes time. So if you’re not planning for that downtime, your cash flow might not survive it.

Top Property Insurance Mistakes Maryland Group Homes Make

Let me tell you about a few common mistakes I see providers make—and they’re the kind that can really sting.

First, forgetting to list all your properties. I’ve had clients who straight-up forgot to tell me about a house they own or rent. If your broker doesn’t know it exists, guess what? It’s not covered.

Second, underinsuring your contents. Let’s say a fire wipes out the inside of a home and you need $100,000 to replace everything. If your contents limit is only $20,000, you’re going to be writing a lot of checks out of pocket.

Third, underinsuring the building itself. Just because a building might only sell for $100,000 doesn’t mean it won’t cost $300,000 to rebuild. That’s where people get burned. The goal is to have enough insurance to rebuild, not enough to get out.

Fourth, the wrong names are on the policy.  I discussed this earlier in the article.  The entity that owns the building needs to insure, unless a contract stipulates otherwise.

Best Practices for Property Insurance in Maryland Group Homes

Here’s my recommendation.

1. Work with a broker who knows group homes. This won’t surprise you, but there is a big difference between insuring pizza shops and residential programs.  You want someone who understands your regulatory environment and operational risks.

2. Do an inventory of everything you own—buildings and contents. Know what you have.

3. Use replacement cost estimators to figure out your building values.

4. Ask about business income and extra expense. Make sure it’s not just on the policy, but that the coverage limits reflect what it would actually cost you to survive a shutdown.

Look, you didn’t build your organization to haggle with insurance adjusters. You built it to serve people. A solid insurance program protects your people, your staff, and your mission—especially when the unthinkable happens.

If you have any questions or you’re not sure where to start, drop a comment or visit me at insuranceforentrepreneurs.net. I’d be happy to help. Complete a form to contact me, or use the contact information to call me or send an email.

Thanks for reading—and go build something great.