Updated on 06.20.16

Car Insurance in Maryland

Devon Rhodes

I saved $540 in less than 30 minutes.

Maryland’s average annual auto premium is a standard $1,716 — a rate that falls just above the national national average of $1,668. And while that statistic seems worth celebrating, you should know that many residents are paying quite a bit more than they have to. I spent some time on a Saturday afternoon investigating the best car insurance options in Maryland and found that with a little digging, I could save over $500 simply by choosing the right provider for me.

I got six quotes for Maryland’s minimum coverage and found prices varied by nearly $540 — that’s a nice chunk of change no matter who you are. GEICO and Progressive offered me pretty comparable rates, but insurance rates are highly personalized, so there’s no way I could estimate whether they would be the best or worst for you. Every insurer has their own formula for determining rates. They all look at the same things — your driving record, your credit score, the make and model of your vehicle — but they weigh them slightly differently.

That said, the only way to find the best deal for you and your living situation is to get a bunch of quotes (five is a good number to start with) and compare them.

Comparison shopping is the key to getting the most for your insurance dollar. Consumers think nothing of price shopping for televisions, computer tablets or appliances to save $20 or $30, but forget to shop around for auto insurance where hundreds of dollars can be saved. There are more than 150 auto insurers (or insurance companies) licensed in the state which offer policies, so there are plenty of places to shop. — Maryland Insurance Administration

GEICO got it right; the entire process of getting a quote is pretty simple, and takes no more than 15 minutes. Online quote tools are usually a breeze, though expect a phone call to add a few more minutes — there’s usually some hold time, and the agent will most likely try to upsell you for more coverage than you ask for (which you should consider). Most of what you’ll need will be easy to recollect (name, birthday, type of car, et cetera), however, your average annual mileage might not be at the forefront of your brain. I’d recommend gathering that beforehand, along with your vehicle’s year, model, configuration (the engine size).

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Our Top 6 Picks for the Best Car Insurance in Maryland

When choosing an insurer, you want to look for more than a low price. It’s important to choose a company that’s financially stable and will be able to pay out when you need them to. Customer service is important as well because unfriendly agents and a slow turnaround time are headaches no one needs. I began with six companies and I recommend them to all Maryland residents. These six companies meet both of those standards: They’ve all earned “excellent” or “superior” grades from A.M. Best, a top financial strength rating agency, and above-average scores in the latest J.D. Power customer satisfaction survey.

Insurer My quote
GEICO $525
Progressive $626
Allstate $654
State Farm $700
Erie Insurance $923
Travelers $1,064

GEICO was the cheapest option for me at $525 a year, with Progressive $101 behind. Allstate and State Farm weren’t too bad either, but things started to go downhill once I got to Erie and Travelers. You’d think that with such a price difference, they both would have been offering more than the state-mandated coverage. Not so for Travelers. Just the same coverage for twice the price. Interestingly enough, Erie Insurance was the only provider that required more coverage, and it was cheaper than Travelers. It just goes to show that every insurer is approaches its customers differently. Who’s to say a family of five kids wouldn’t get a better rate with Travelers? That’s certainly not me, but it could be the case for you. I can’t stress getting your own quotes enough. In fact, if you left this article and only got a quote at GEICO, the company that was lowest from me, you’d be leaving money on the table.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Auto insurers weigh customer loyalty when determining your premiums. They look at your credit score, online shopping habits, and even your social media to decide how likely you are to stick with one company, and they use that data to calculate your rate. The thing is, where you see loyalty, your insurance company sees complacency. If they think you won’t shop for a better deal, they’ll quietly raise your rates and you’ll never know you’re paying more than you should be. It’s called price optimization.

That’s why it’s best to shop for a new policy every year or two. Insurance companies can see when you get quotes, and if they think there’s a good chance you’ll leave them for a competitor with a better price, they’ll quote you a lower rate.

Luckily, Maryland is one of more than a dozen states that have banned price optimization within their borders. The Maryland Insurance Administration issued a bulletin in late 2014 requiring all insurers using price optimization to file a corrective action plan. The state has insisted insurance companies remove any factors not related to risk from their pricing models, as varying rates based on loyalty is unfairly discriminatory and in violation of state law.

“It has come to the attention of the Maryland Insurance Administration that some insurers are using ‘price optimization’ to rate insurance policies in Maryland. The MIA has determined that the use of price optimization results in rates that are unfairly discriminatory in violation of the §27-212(e)(1) of the Insurance Article. As a result, insurers may not use price optimization to rate policies in Maryland.” — Maryland Insurance Administration

If you haven’t gotten new quotes in the last few years, it’s definitely worth it now — your old rates might have some lingering effects of price optimization. Plus, your risk usually lowers as you age, so it’s likely you’re less expensive to insure as well.

Maryland’s Minimum Coverage

The Bare Minimum

Maryland residents must have $30,000 of bodily injury coverage per person and $60,000 per accident, plus $15,000 of property damage liability coverage. The state also mandates uninsured and underinsured motorist coverage with the same minimums as the liability coverage and $2,500 of personal injury protection.

The Best Car Insurance is Not Just Cheap Car Insurance

It’s always best to purchase more than the minimum coverage. Consider these facts:

  • The average driver will get into an accident every 17.9 years.
  • The average cost of a disabling, but nonfatal injury is $80,700.

If I have minimum coverage and I cause an accident that permanently disables someone, my relatively cheap car insurance policy is only going to pay its $30,000. That leaves me with $50,000 to pay out of pocket; $50,000 that most of us probably don’t have. I’d have to drain my savings account in order to cover the remaining damages. Who wants to watch their retirement slip away due to one unfortunate mistake behind the wheel? Remember: You don’t have to hit a person to cause that kind of damage. Hitting a super expensive car, or causing minor damage to multiple cars in a pile-up, can easily draw upwards of $100,000 in damages. That’s not a risk I want to take.

Raising my liability coverage limits to $100,000/$200,000 would only cost $558 with GEICO — that’s only $33 extra a year. I won’t even notice that extra couple of dollars I’m paying on my monthly premiums, but if I get into an accident like the one I described above, I won’t have to pay anything out of pocket. In the course of 18 years, that’s a small price for a lot of peace of mind.

You may also want to think about adding protection for your vehicle as well. If you have a lease or loan on your vehicle, your lender will likely require collision and comprehensive coverage. Collision pays for damages to your vehicle following an accident with another driver while comprehensive covers things like theft, vandalism, and natural disasters.

If You Skip Coverage, It’ll Cost You

Driving uninsured will cost you a lot more than having cheap car insurance would. You’ll get a $150 fine for the first 30 days, and $7 for each additional day up to a maximum of $2,500. Your vehicle registration will also be suspended.

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Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

Insurance rates depend on a ton of factors, and there’s a lot you can do to adjust these factors in your favor. Paying in full, decreasing your average annual mileage, and improving your credit score are just a few ideas. For more, check out our list of factors that affect your premiums below.

Nine Ways to Lower Your Car Insurance Rates

FAQs

Why are Maryland’s rates just average?

What to Expect
Average Monthly Premiums
United States $139
Maryland $143
Baltimore $158
Bowie $127
Gaithersburg $116
Frederick $98
Source Quadrant

Maryland’s auto insurance minimums are higher than what most states require, which raises the average premium cost for the state. It’s unusual for states to require more than $25,000/$50,000 liability coverage and even less common for uninsured motorist coverage and personal injury protection to be a requirement. There’s nothing much that can be done about this, though, as it’s state law that all drivers must carry these coverages.

Maryland also has a high population density compared to most states and insurance rates are always more expensive in urban areas. There’s a higher likelihood of crashes and theft and medical and repair costs are often higher as well.

An Expert’s Perspective

While I was digging into research for this report, I asked George Washington University graduate and longtime Maryland attorney Joseph C. Hangarter about auto insurance and vehicular claims litigation. He had a bunch to say:

Should drivers consider more than the minimum coverage? Why or why not?

Absolutely!  First, the driver could be facing bankruptcy if they have the minimum of $30,000 in liability coverage (in Maryland) and cause any accident. Any type of collision with a serious injury could put another person into intensive care, where the costs of care could mount at $50,000 or more per day.  Surgery drives the costs up even further. Future lost wages for a permanent disability can reach into the millions.  If a huge claim is made against the driver with minimum limits, that driver will almost invariably be driven into bankruptcy, unless they have little or no assets or income from which to collect the judgment.

Also, in Maryland, a policyholder is only allowed to have Uninsured (and Underinsured) Motorist Coverage (UIM) in the amount of their liability coverage, or less.  If someone with a $30,000 policy hits you, and you have a $30,000 liability and UIM policy, the limit of your recovery is generally $30,000, no matter how severe your injuries.  Whereas, if you have a $500,000 liability and UIM policy, and you suffer very serious injuries due to the negligence of the driver with $30,000 in coverage, you would get $30,000 from their liability company and then $470,000 more from your own UIM company.  This may not compensate you fully for a permanent disability, but it would certainly help.

If you have significant assets, I also recommend having an umbrella liability policy of at least $1,000,000.  The cost of this is usually less than $200 per year.  While this may not completely pay for the damages of someone you permanently injure, a $1,000,000 policy limits offer form your umbrella insurer, will almost always cause a plaintiff to settle the case, and to leave your personal assets alone.  If you can find an insurance company that will write a UIM policy that will extend to the limits of your umbrella policy, that would be a good investment as well.

Please note that it is my job to do battle with insurance companies and I am telling people to increase their limits and pay the insurance companies higher premiums.  Insurance companies that have a higher policy at stake, will also be more willing to settle the case and keep you out of a courtroom, than those with lower policy limits, in my experience.  Further, there higher liability limits generally do not cost too much more in premiums, compared to the peace of mind they provide.

Based on your experience, what is the average cost of damages from a serious, but non-fatal wreck?

This is impossible to estimate. In fact, the damages from a “non-fatal wreck” are often higher than from a fatal wreck. This occurs because the survivors can often be left with huge future medical and/or care expenses, as well as huge future lost wages. Also, there is only some correlation between the severity of the impact and the damage it causes. One person may suffer a 15–20 mph rear end collision, and have no significant injuries, while another may suffer a very low impact, 5 mph, rear end collision and herniate three discs in their neck, requiring surgery. A traumatic brain injury causes all bets to be off on the future damages that can be claimed, due to the unpredictability of the recovery.

What is the most common vehicular incident in your area?  

I think the most common vehicular accident in most areas is the rear end collision, probably followed at a distance by the left turn across the path collision, and the intersection T-bone collision.

Have you observed any particular auto insurance companies to be easier to work with than others?

If I were to have to pick any companies that I thought offered more reasonable amounts to try to settle cases to try to keep their policyholders out of court, and to avoid putting their policyholders’ personal assets at risk, I would probably have to say Erie and USAA. I would not say that any insurers give away money when they don’t have to, but these two are on the more reasonable side of the balance. However, this largely depends on the adjuster that is assigned to the case and, often, that adjuster’s supervisor. It can also depend on whether the company uses an attorney that works for them to defend the case or one that they hire to do so from the outside.

Which insurer makes the claims process the easiest?

I would not say that any insurance company “makes the claims process the easiest.” Some companies, and I have named two, are less likely, from my experience, which is purely anecdotal evidence, to make absurdly low and insulting initial offers to plaintiffs. Such offers often entrench plaintiffs into their positions and make a trial inevitable. The worst position that a personal injury defendant can be in is to be in a trial with a possibility that the judgment will exceed their insurance policy limits and put their personal assets at risk. An insurer that “doesn’t give an inch” is bad to have on your side, rather than good, as you will wind up in court, when you could have had your accident, and all the anxiety it causes, behind you.

The Bottom Line

Here’s the deal: You won’t find the best car insurance policy possible unless you shop around. It takes no more than a couple of hours (in total) to find out exactly where you stand with your current provider. Maybe, your rates are pretty competitive as they stand, and you’ve been saving money in a sense this whole time. The more likely scenario, however, is that you could save hundreds by switching to a couple of different companies. And remember: Don’t stop when you think you found the one. Keep the practice up every couple of years or so — it’s good to know the market.

Unless you have about $85,000 in your “in case I smash someone or something with my car” fund (and I definitely don’t), extra coverage is also a huge deal. I’d recommend going with a 100/300/100 policy myself. At least that way you be in a life-long financial predicament if the worst actually happens. So go ahead — grab your laptop, get comfy, and get some quotes.

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