Baltimore City drivers know all too well the conclusions of a just-released Abell Foundation study: that city residents suffer much higher auto-insurance rates than other Maryland residents. But the report by Abell, a nonprofit grant-making and research group based in Baltimore, teased out some facts that are bound to outrage already-gouged city drivers. A Waverly family of three with two cars, for instance, pays 160 percent more than the same family living in Cockeysville and 198 percent more than those living in Westminster. What’s more, rate-setting is based in part on credit history, so poor people with bad credit suffer higher rates—and even higher if they live in the city. Since the availability of jobs is greater for those with cars, there’s a vicious cycle at work here.
So what to do about it? Abell’s report, written by former Sun scribe Tom Waldron, recommends a full-blown reform effort. First off, the state’s regulators should thoroughly analyze what auto insurers are doing to set rates and encourage them to put greater emphasis on the basic issue: the actual driving habits of motorists, rather than where they live or their credit histories. After all, accidents and driving-related court cases are relatively high in Baltimore City because lots of people from all over, not just city drivers, use the city’s streets. Discounts for group buyers, tort reform, and better efforts to reduce car theft and insurance fraud are also worth discussing, the report urges. Titled “Actuarial Discrimination,” the full study is available online.
