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Car insurance fund seeks rate cut averaging 4.9%


The state-backed automobile insurance fund, which acts as an insurer of last resort, filed yesterday for a rate decrease averaging 4.9 percent. But relief would be minimal for Baltimore drivers, who pay the highest auto insurance premiums in the state.

Rates in the suburbs within a five-mile band of Baltimore would actually rise, said Martha Roach, executive director of the

Maryland Automobile Insurance Fund. "That is making that band look more like Baltimore City," she said.

The rates, which must be approved by Insurance Commissioner John A. Donaho, would take effect Jan. 1.

Rates would also go up in Montgomery County suburbs within a five-mile radius of Washington, Ms. Roach said. But they would fall in the rest of the state, including drops of 7 percent to 7.2 percent in the farther-out Baltimore suburbs of Cockeysville and Severna Park.

"We have many, many different programs that are very effective," Ms. Roach said, adding that the decrease would be MAIF's third rate cut in the past two and a half years. She credited strict claims investigation and close oversight of the medical care of people hurt in accidents that were caused by MAIF-covered drivers with cutting the company's expenses.

She also said juries appeared not to be giving large personal-injury awards as readily as in the past. "The juries are being very, very cautious," she said.

But Ms. Roach defended the rate decrease of only 0.3 percent for MAIF drivers who are over age 30, have clean driving records and live in Baltimore City. Their cost for a standard package of insurance, which basically is the coverage required by law, would fall only $5 a year, to $1,546.

"Our Baltimore City rates are never adequate," she said. "There is a reduction, but if this driver in Baltimore City chose optional [personal injury protection], he would be able to reduce his premium by $200."

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