If the third time is indeed the charm, Maryland legislators this year will finally eliminate geographical ratings for auto insurance.
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Currently, insurers can use geographical information to determine how much to charge for private automobile insurance as long as they can show they aren't basing rates solely on where someone lives.
Over
the past several years legislators have tried to eliminate geographical
ratings, insisting that insurance companies look at the state as a
whole, but have so far been unsuccessful in changing the regulations. Private insurance companies wouldn't be the only ones
affected by the change. The Maryland Automobile Insurance Fund (MAIF),
a state agency created to provide automobile liability insurance for
persons rejected by at least two private insurers, presently uses
geographic areas to set up premium rates that are adjusted for the
frequency of claims. Should the regulations change, the MAIF would have
to create a statewide average premium, which would raise rates for
those in rural areas while lowering rates in urban areas.
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