Why Do Baltimore Drivers Pay More for Insurance?

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Our main office is now in downtown Baltimore.  I love it here.  I really do.  But driving in Baltimore can be a pain. The daily commute usually involves at least one narrowly escaped crash, jaywalkers deciding to cross right as your light turns green, and the Circulator cutting you off a few times. It’s the price of doing business downtown.

Baltimore’s drivers aren’t the best, but they’re definitely not the worst. That’s because they’re only the second-worst. Allstate rated Baltimore’s drivers 193rd out of 194 different cities in the US. D.C. was the only city that fared worse.  There is a reason Baltimore car accident lawyers keep busy and why Maryland ranks 9th in the cost of car insurance premiums.  While this reality makes our drives more perilous every day, it affects city residents’ wallets in a huge way.

Using Where You Live to Charge You More

Why are insurance companies allowed to charge more to Baltimore City drivers?  Maryland allows insurance companies to use “territory” as a factor when deciding how to set their rates. This allows the insurance companies to say, “You live here. The drivers are horrible here. So we will charge you more to cover for it.”

The insurance companies use all kinds of factors to determine how much to charge you: driving history, how much you drive, the type of car you drive, etc. But the “territorial” factor only looks at where you live. If that place is Baltimore, you pay more. If the difference in cost was slight, it wouldn’t be such an enormous deal, but some insurance companies charge astronomically high prices for Baltimore residents.

For example, a 23-year-old Baltimore driver will pay $400 more in premiums than the same driver living in Anne Arundel County and $300 more than a driver in Baltimore County. A single 30-year-old man living in Baltimore City pays an average of $500 more than he would pay for the same insurance in Montgomery County.  It hardly seems fair. Even worse, smaller companies don’t want to touch the Baltimore market, with Keystone and Unitrin charging $2,000 more for city residents.

This is bad, even if you’re insured by a big company like Allstate or State Farm. Fewer players in the market equal less competition. And less competition equals higher premiums. This isn’t exactly a new problem either. The last politician that wanted to do anything about it was Governor Parris Glendening, who proposed a plan to force insurance companies to pick up a certain share of the Baltimore market based on their share of the total Maryland market. Still, this was back in 1995, an age when cassette tapes were cool, and the word “blog” was unheard of.

 Maryland Does Not Do Much to Help

maryland insurance regulationsWhen I say Maryland “allows” insurance companies to do this, the insurance companies don’t exactly have to jump through many bureaucratic hoops to charge you more. The COMAR regulations only require insurance companies to file a “certification statement” that swears that they “reviewed” the use of territory as a factor and that they are “actuarially justified” for charging more. Not exactly a high bar to satisfy. Basically, as long as the companies say that they’re justified, without providing more information, they’re free to reach straight for your wallet.

This is yet another factor that makes the cost of living in Baltimore so high. It is hard to fathom why a middle-class family (or anyone) would want to spend an extra $400 on insurance premiums when they could move across the city line and save the cash on car insurance not to mention the difference in the property taxes.

There has been talk in the Maryland legislature, offered by Baltimore based delegates, that Maryland insurance companies should not be able to consider venue in determining auto insurance rates.  If this were to become law, the car insurance rates would rise for everyone not living in Baltimore.  Most of us reading this don’t live in Baltimore.  So the chances of this happening probably rival that of Ray Rice guest-hosting “The View” next week.

How to Get the Cheapest Possible Price on Car Insurance in Baltimore

We are Baltimore car accident lawyers, not insurance agents.  But we do have thoughts on this subject.

You can get a cheaper price on car insurance.  The key is sweat.  Spend some time comparing the different companies.  There are so many websites that let you compare rates and get information.  Talk to the top three.  Ask them about discounts. Tell them point blank what you need: as much coverage as possible for the cheapest possible rate.

Just make crystal clear what your goals are and sometimes the agents can dig a little deeper to find the discounts or plans that will work best for you. Please don’t skimp on the coverage.   For relative peanuts, you can get a lot more protection if someone hits you that does not have car insurance.  (And, please, don’t waiver PIP.)  Finally, make sure you are comparing apples to apples.   So many people get burned when comparing differing insurance coverages.

If you are trying to get the lowest rates, look at what Progressive Insurance provides on their website.  I would never recommend Progressive to anyone, but they do a good job of comparing the insurance companies to help you get the best rate.  (The problem with Progressive is they struggle to pay fair value on claims.)


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