Smart Auto Insurance Blog

According to the article “Senate Approves Bill to Increase Auto Insurance Liability Coverage” by Michael Dresser on baltimoresun.com, quotes on auto insurance in Maryland are due to change because of the new law.  The Senate voted to raise the minimum liability limits for auto insurance policyholders for the first time in about 38 years.

The final vote for this landmark decision was 27-20, sending the bill to Governor Martin O’Malley for his approval.  The law was approved after a tough fight led by the Senate Republicans as well as some Democrats.  The measure put state’s lawyers and some of their clients against auto insurance companies and advocates for the poor which was a point constantly made by GOP senators.

The new bill is expected to affect over 200,000 Maryland residents who have the minimum amount of auto insurance coverage.  Most of the approximate 2 million policyholders who carry more comprehensive protection will not be as affected.  It’s still to be determined exactly how Maryland auto insurance quotes will be affected.

According to the Baltimore Sun’s Liz Kay, 67 Maryland auto insurance companies have been fined by the state’s Insurance Administration. The insurers were found to have under compensated drivers whose cars have been deemed a total loss, by failing to take into account increases in state sales tax and Motor Vehicle Administration fees when calculating a car’s value.

Liz reports that the over 4,000 drivers affected have already received refunds, averaging about $100 each (total restitution being $442,000). The companies (listed here) were also charged a $235,000 fine. Always make sure to make sure exactly what level of auto insurance claim your policy covers, so you aren’t greeted with an unpleasant surprise.

“High-risk” or drivers with a checkerd driving history have always paid more for their auto insurance coverage from coast-to-coast.  However, in Maryland the upcharge for being a “bad driver” is unusually steep.

The insurer of last resort in Maryland is prohibited from allowing high-risk drivers to pay their auto insurance premiums in installments (ex. monthly) like other drivers, they must pay the entire annual premium up-front.  If they can’t afford to pay the entire year of premiums up-front ($2,500 per year on average) they must borrow money to finance the premiums.  In these cases 75% of the interest is within 5 months, in case the policy is canceled early

The system has been denounced as unfair to 70,000 low income or immigrant drivers in Maryland who are forced into this pool, after being turned down by other auto insurance companies.

About half the drivers enrolled in the pool are eventually canceled for nonpayment and more than 60% have no traffic offenses but were refused other auto insurance coverage because they lack a credit history or driving experience. Thousands are recent immigrants.

More information about Maryland auto insurance.