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Territorial rates a hot button in Maryland

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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