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Auto insurance industry urges Maryland reforms

Daily Record, The (Baltimore), Dec 13, 2005 by Kathleen Johnston Jarboe

Insurance advocates yesterday urged lawmakers to drop the amount of car insurance Maryland drivers must buy and to allow the state's riskiest drivers to pay for insurance in installments.The recommendations come as a task force examining why auto insurance rates are higher in Prince George's County and Baltimore City prepares to issue recommendations on how to alleviate the problem.

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A report by the Abell Foundation found that motorists in Baltimore pay 198 percent more for car insurance than others in the state.Insurance industry officials said Maryland could help by allowing drivers to buy less coverage and by targeting some of the factors causing high rates.Consider allowing people to exercise more choice in the marketplace, said David Snyder, vice president and assistant general counsel of the American Insurance Association, a Washington-based industry advocacy group.Snyder suggested Maryland drop requirements forcing drivers to buy coverage against personal injuries and wrecks caused by uninsured motorists.Insurance industry advocates argued instead that personal injuries could be covered by medical coverage. Also, as policies become more affordable and more drivers thus become insured, there would be less need for uninsured motorist coverage. Pricy policies force some motorists to violate state law and not buy insurance, industry representatives said.Uninsured motorist policies cover injuries and damages caused by drivers who do not have any coverage of their own. On a longer- term basis, more money for traffic safety and law enforcement against fraud, theft and unsafe driving could help lower the number of claims, said industry representatives. Last year more cars were stolen in Prince George's County, about 18,000, than in the entire state of Virginia, about 17,000, according to insurance company Geico. Drivers from urban areas also submit more claims per year than other jurisdictions, according to industry representatives. And with more claims landing on the industry's bottom line, Snyder said, Costs equal rates.Officials from the Maryland Automobile Insurance Fund also recommended the state let drivers with MAIF coverage pay their insurance through installment plans. Now these motorists must pay their premiums for a year, up front.About 96 percent of drivers insured through MAIF can't make the annual payment plan, officials said. Instead, they turn to pricey financing plans to break the premiums up. MAIF officials estimated the plans add $200 to $400 to MAIF policies.Close to one-third of MAIF drivers reside in Prince George's County. MAIF is a state-mandated but independently financed agency that sells insurance to drivers who can't get coverage from private insurers.The task force has been meting since May. Legislators from Baltimore City, Prince George's County and officials from the Maryland Insurance Administration hold seats on the task force. The last time a legislative group looked at this issue was in 1995.Lawmakers have been concerned about the high rates paid by their constituents. The panel is scheduled to make recommendations as the General Assembly prepares to meet for the 2006 session.There are some major concerns we do have. We do have significant obstacles to overcome here, said Del. Marshall T. Goodwin, D-Baltimore City. The industry seems to be robbing citizens.He and fellow panel member Del. Obie Patterson, D-Prince George's, both said any bill proposals would contain consumer education campaigns, especially urging consumers to shop around.

Auto insurance industry urges Maryland reforms

Daily Record, The (Baltimore), Dec 13, 2005 by Kathleen Johnston Jarboe

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