Why is Maryland's Minimum Auto Insurance Amount So Low?
There was an article in yesterday's Baltimore Sun about a young man who was seriously injured in a car accident- he was hit by a taxicab while riding his bicycle. The article focused on his struggle to obtain medical care. One of the things that was pointed out was that the taxi only had $20,000.00 in liability insurance, which is the minimum amount of insurance allowed under Maryland law. The taxi's insurer is the Maryland Automobile Insurance Fund (MAIF), which is the state's insurer of last resort.
In handling auto accident injury cases in Baltimore City, I have noticed over the years that it seems that more drivers in Baltimore City have minimum limits than in other places. Also, more often than not these are MAIF policies.
In a serious injury case, a brief stay at Shock Trauma can eat up $20k immediately. 20k isn't enough coverage for anybody. Why does our state require such a minimal amount of insurance?
I am sure some of you are saying "That's why I have high limits on my policy- so I am protected from an uninsured or underinsured motorist." Some people are thinking that it isn't fair to low income, new, or geographically disadvantaged drivers to require more insurance. Those folks pay higher premiums, so a higher insurance requirement would be a financial hardship.
Well, there are a lot of people who aren't covered by any UM policy. For example, a person who doesn't own a car and does not live with a relative who owns a car is not likely to have any coverage available for UM/UIM. For example, my elderly aunt who doesn't drive but frequently walks to take care of her errands. Also, insurance isn't really that costly. What really hurts low income/high risk drivers is that they are often limited to coverage through MAIF. The problem is that MAIF requires payment up front on their policies, so consumers are at the mercy of financing companies that put up MAIF's premium and charge interest on monthly payments. Someone who has a minimum policy is also unlikely to have assets to pursue to satisfy an excess judgment.
What kind of public policy is this? Is the state promoting irresponsibility at the expense of victims? Maybe we would be better off if the required minimum were higher, even if it made insurance more costly for some people. Driving isn't a right. Should we help out people who can't really afford to drive at the expense of those who are just trying to walk around safely?
Other laws requiring set amounts of money have built in increases over time, like Maryland's statutory cap on non-economic damages. Why can't our mandatory required insurance be modified as well?
Comments
I think it was mildly amusing that I stumbled onto this article while browsing to find the status of auto insurance reform in Maryland.
As a lawyer, I'm reasonably sure the economy hasn't affected you like it has for many others. But, for too many people, the cost of insurance in Maryland - especially inside the beltway - is already hard enough to cover. With the economy the way it is, more and more people are forced to choose between essentials like food and shelter and "luxuries" like good full-coverage insurance. As an example, try to picture what $1500 a year means to a two car family that's bringing in $50,000 (or less) a year, or worse, to a family where the bread winners have lost their jobs to the now popular business closings.
If you want to see higher minimum coverages, I would suggest figuring out how to get the insurance companies to offer rates that are within reach of the average driver.
Posted by: D. S. Cohen | March 26, 2009 5:11 PM