Fairer MAIF rules could curb costs

May 12, 2008

Eileen Ambrose's column "Auto insurance bound to rise" (May 5) suggests a number of ways to weather the rising cost of auto insurance during this economic downturn.

She does not mention, however, another answer to the problem - an easy legislative step Maryland can take to make auto insurance more fair for all residents.

One key to keeping premiums low across the board is reducing the number of uninsured drivers on our roadways. Uninsured drivers cause property damage and injury and cause all of our insurance premiums to increase.

In Maryland, drivers have two choices if they are deemed "uninsurable": They can come to the Maryland Automobile Insurance Fund (MAIF), the state's insurer of last resort, and be forced to pay their premium, in full, at the inception of a policy, or they can forgo insurance altogether and take their chances on our roads.

It is a disgrace that unlike other drivers, those using MAIF are not allowed to pay for their insurance through installment payments. No other state has such a foolish policy.

It is time for the General Assembly to abolish this archaic restriction that benefits only the insurance premium financing companies.

This industry charges 26 percent interest on fully secured loans to pay for MAIF insurance. When this is combined with the other upfront charges of the financiers, it exploits working families until, in disgust, some simply leave the insurance market.

And uninsured drivers continue to run up the cost of insurance for all of us.

Although as ordinary citizens we have little control over rising gas costs or skyrocketing food prices and health care, we can voice our distaste for the current insurance law and our interest in seeing the system changed to make it fair to all those insured through MAIF.

M. Kent Krabbe

Annapolis

The writer is executive director of the Maryland Automobile Insurance Fund.

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