Maryland’s average annual car insurance premium is $1,546, a rate that falls just above the national average of $1,502. And while that statistic seems worth celebrating, you should know that many residents are paying quite a bit more than they have to.
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Quotes from various insurers for Maryland’s minimum coverage can vary by thousands of dollars. Insurance rates are highly personalized, and every insurer has its 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 situation is to get a bunch of quotes (five is a good number to start with) and compare them.
Online quote tools are usually a breeze to use, but 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, etc.). However, your average annual mileage might not be at the forefront of your brain. Gather that info beforehand, along with your vehicle’s year, model and configuration (the engine size).
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 it to. Customer service is important because unfriendly agents and slow claims processing are headaches no one needs. The six companies on this list have all earned “excellent” or “superior” grades from A.M. Best, a top financial strength rating agency.
Maryland’s Minimum Coverage Requirements for 2020
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.
What is the average cost of damages from a serious but nonfatal accident?
The average cost of a disabling car-accident injury is $93,800. Damages from a nonfatal wreck are often higher than from a fatal wreck because the survivors can be left with huge medical expenses and 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 low-impact, 5 mph rear-end collision and herniate three discs in their neck, requiring surgery. All bets are off if someone suffers a traumatic brain injury because of the unpredictability of recovery and damages.
Why would I purchase more than the minimum coverage?
It’s always best to purchase more than the minimum coverage. Consider that roughly 6 million car accidents happen each year in the United States alone.
If a driver has minimum coverage and causes an accident with heavy damage, he or she likely would have to drain their savings or be taken to court to pay the 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 pileup can easily cause upward of $100,000 in damages. That’s not a risk many people would knowingly take.
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.
What is no-fault insurance?
No-fault insurance is a form of insurance that covers your bills, regardless of who caused the accident. Maryland, however is a fault state. This means that the one responsible for the crash is responsible for the bills.
What happens if I skip coverage?
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. To get your driver’s license back, you’ll need to file an SR-22 certificate with the state that proves you have insurance. Car insurers tend to charge higher rates to drivers who need SR-22 insurance.
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Why are Maryland’s rates just average?
Maryland’s car 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 with 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.
Which insurer makes the claims process the easiest?
Some companies are less likely 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, as you will wind up in court.
Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years
Car insurers weigh customer loyalty when determining your premiums. They look at your credit score, online shopping habits, and even your social media pages 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 better car insurance company 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 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, citing them as discriminatory.
If you haven’t gotten new quotes in the past 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, especially if you were classified as a young driver when you first signed onto your policy. Similarly, if you were a low-credit driver when you first applied, you should shop around if your credit score has since improved. Good drivers who have driving records that are clear of traffic violations for several years in a row can also qualify for reduced premiums.
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 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 disposable cash lying around, extra coverage is a smart investment. If you can manage it, consider a 100/300/100 policy. At least that way, you won’t be in a lifelong financial predicament if the worst happens. So go ahead, grab your laptop, get comfy and get some quotes.
Best Car Insurance in Maryland
- Erie Insurance
- State Farm