Insurance study OK'd by board Auto insurance rates, losses to be focus of effort.


The Board of Estimates yesterday approved $50,000 for a study aimed at buttressing several efforts to lower auto insurance premiums for city drivers.

The study, to be done by R&B; Associates Unlimited Inc., will compare the insurance losses incurred by city drivers with their suburban counterparts. City officials and insurance advocates in the city hope the study will yield information that helps their work on several fronts:

* In lobbying the General Assembly to outlaw "territorial rating," an practice that pegs insurance rates to the area where a driver lives.

* In laying the groundwork for a non-profit insurance company that members of the City-Wide Insurance Coalition believe can offer automobile premiums that save average city drivers $250 a year.

* In helping to launch a "third-party claims administration," which would perform many of the functions of an insurance broker. The idea, endorsed by Mayor Kurt L. Schmoke, is to group city drivers together and have insurance companies bid for their business in a block. The administrator would help eliminate some administrative costs for insurance companies, presumably allowing for lower rates.

* In providing information for a possible lawsuit challenging territorial rating.

"This is a no-lose proposition for the city," said Richard Krummerich, an aide to Mayor Schmoke.

Although Mr. Schmoke was prodded by members of coalition and the City Council before supporting the idea of a study, he said he is determined to work for lower automobile insurance rates.

"It is very clear that auto insurance rates are a hidden tax on people living in the city," he said.

Currently, city automobile insurance premiums average about $1,300 a car -- about double the rates paid by suburban drivers, according to a coalition study.

News of the city's backing of the study pleased many people who have been agitating for the mayor to act on the issue.

But A. Robert Kaufman, president of the coalition -- whose membership includes 163 community groups -- was critical of Mr. Schmoke for not providing all the money needed to lay the groundwork for a non-profit insurance company.

Mr. Kaufman said another $100,000 is needed to perform the studies needed to bring his group's idea of a non-profit insurance company to fruition. And Mr. Schmoke has promised another $50,000 for that work if insurance activists can raise $60,000 privately.

"This is an insult," Mr. Kaufman said. "The people want the mayor to fund the entire study and stop wasting our time."

Mr. Schmoke does not see formation of a non-profit insurance company for city drivers as a viable option. And Mr. Kaufman's outrage was not shared by everyone who lobbied for the mayor's support.

"We can raise the money," said Councilman Melvin L. Stukes, D-6th, who chairs an ad-hoc committee overseeing the insurance study. "It will not fail for lack of effort," he said.

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