Curran says law allows territorial car insurance


Maryland's attorney general, seeking to put to rest questions from the Baltimore City Council president, confirmed that state law allows auto insurance to be priced according to where a driver lives.

In a letter sent late Tuesday to City Council President Mary Pat Clarke, Attorney General J. Joseph Curran Jr. said, "We have no basis on which to advise that the law is any different than it was when [approved] by my predecessors" in 1977 and 1982.

The letter was prompted by Ms. Clarke's objection to a ruling Monday by Insurance Commissioner John A. Donaho. That ruling, after nearly a year of deliberations, said that the practice of "territorial rating" for auto insurance is legal and justified by insurance accounting practices.

Ms. Clarke and others have been pressuring Mr. Donaho to reject the practice, which results in Baltimore's insurance premiums being nearly three times higher than those on the Eastern Shore.

In a three-page letter, Mr. Curran told Ms. Clarke that the law allows insurers to charge drivers according to where they live, as long as the data about losses and expenses in those areas are valid.

Mr. Curran did note that Mr. Donaho has the right, but not the obligation, "to insist upon more exacting data that might result in geographic line-drawing that departs from the traditional."

Ms. Clarke said that despite Mr. Curran's letter, a private group she represents will go to court to challenge what she said are the discriminatory methods insurers use to set their pricing territories.

She said she would ask the governor for his support for the establishment of a consumer advocate for insurance and "for some relief for Baltimore City, Prince George's County" and other areas with high insurance rates.

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