Maryland Proposal Could Increase Auto Insurance Rates

03/22/2010

Liability insurance can be used to cover medical bills incurred following an automobile accident.

A new proposal from Maryland lawmakers could increase that state's insurance premiums to the highest in its region, according to a recent editorial by the Baltimore Sun. This would have little effect on most drivers, who opt for higher liability coverage voluntarily.

"But for low-income drivers, particularly those who are insured through the Maryland Automobile Insurance Fund or MAIF, the state-sanctioned insurer of last resort, the impact would be substantial," the editorial wrote.

This would increase family rates by 5 to 15 percent, and premiums for individuals by as much as 10 percent. Such rate hikes could put auto ownership out of reach for some individuals, according to the editorial, which could prevent them from seeking certain jobs.

Maryland's legislation would increase the amount of liability insurance required for incidents injuring one person from $20,000 to $30,000; and for those injuring multiple people from $40,000 to $60,000.

These increases could also inspire families to drop their coverage, despite state mandates, which could lead to higher premiums for policyholders. Most states currently require motorists to purchase auto insurance, while all enforce financial responsibility laws.

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