Maryland rated among most costly states for car insurance

Maryland’s Rank for Cheap Car Insurance: 40th nationwide

With average annual car insurance premiums on the rise, the personal-finance website WalletHub released its 2019 report on the States with the Cheapest & Most Expensive Car Insurance, along with a review of Maryland’s Best Cheap Car Insurance Companies.

To determine the cheapest car insurance options in Maryland and the U.S. overall, WalletHub compared 206,974 quotes across 47 states.

Top 10 Cheap Car Insurance Companies in Maryland:

2 Horace Mann
3 American National
4 Brethren Mutual
5 IDS Property Casualty
6 Cumberland Insurance
7 Unitrin
10 Allstate

Best Cheap Car Insurance Companies in Maryland by Demographic:

Cheapest for Men: GEICO
Cheapest for Women: American National
Cheapest for Young Drivers: GEICO
Cheapest for Seniors: Brethren Mutual Insurance Company


54 million Americans say they don’t understand their car insurance.

75% of drivers say they want the best car insurance, not the cheapest coverage.

14% of people say they would not buy car insurance if not legally required (millennials are 2X more likely than boomers to agree).

71% of people say it’s unfair for gender to be a factor in car insurance pricing, and 65% feel the same way about credit scores affecting car insurance costs.


64 Million People Prefer the Cheapest Car Insurance to the Best Coverage

Differences in weather patterns, traffic congestion and crime are key underlying factors in car insurance rates. (Wikimedia Commons)

Car insurance is expensive. The average adult in the U.S. spends roughly $1,000 per year on coverage, according to the Bureau of Labor Statistics – more than we spend on fruits and vegetables, alcoholic beverages or our pets, for example. That helps explain why 64 million people, or 26 percent of us, say they want the cheapest car insurance rather than the best coverage, according to a new survey from the personal-finance website WalletHub.

A lack of financial literacy also plays a major role in consumers’ attitudes toward car insurance. Roughly 54 million people (22 percent of U.S. adults) say they do not understand their car insurance, WalletHub found. In other words, as invested as we are in protecting our wheels, millions of drivers still need a learner’s permit when it comes to their car insurance policy.

Coverage Confusion

Part of the reason for consumers’ uncertainty is the confusing hodgepodge of insurance companies and regulations that are sufficient to make even a knowledgeable shopper’s head spin. “There are at least three areas in which the state in which you live will affect how much you pay for coverage,” Douglas Heller, an insurance expert with the Consumer Federation of America, told WalletHub.

For starters, minimum coverage levels vary by state. “Second, each state monitors, or regulates, the insurance industry in different ways,” Heller said. “In some states, such as California, before raising or changing rates and pricing practices, insurance companies must go through a strict review by government actuaries, lawyers, and other experts to ensure that rates are not inadequate, excessive, or unfairly discriminatory.” The third reason, according to Heller, is that “states may have different risk profiles related to things like traffic density, road conditions and maintenance, weather, and the cost of injury care and car repair.”

This, along with a general lack of subject-matter understanding among consumers, may also help explain why 63 million people, or 25 percent of U.S. adults, have never switched car insurance policies. Picking a policy the first time may have been hard enough, and no one wants to trade down by mistake.

Unfair Pricing?

There are also some trends in car insurance pricing that many consumers understand are happening but most do not agree with on the basis of fairness. For example, people with no credit pay an average of 67 percent more for car insurance than people with excellent credit. And two-thirds of WalletHub survey respondents believe it’s unfair for credit scores to affect car insurance costs. Yet most drivers don’t realize just how much of an impact their credit actually has.

Although just three states – California, Hawaii and Massachusetts – ban the use of credit data in car insurance pricing, “all should,” said J. Robert Hunter, director of insurance with the Consumer Federation of America. “It is a proxy for prohibited classes of income and race.” In other words, credit data could be a seemingly palatable way for car insurance companies to discriminate against certain groups.

The most significant thing a state can do to promote inexpensive car insurance is require insurance companies to justify their rates and practices before they can raise prices on drivers
People with no credit pay an average of 67 percent more for car insurance than people with excellent credit. (Dan Keck Wikimedia Commons)

Car insurance companies also factor gender and geography into policy pricing. And while the intent may be similar, consumer opinions on the practices are not entirely consistent. More than 7 in 10 people say it’s unfair to include gender in car insurance pricing, according to WalletHub’s survey, but there’s a 50-50 split regarding the use of zip codes. It may just be that gender and geography, particularly the latter, have a legitimate role in insurance pricing given their impact on risk.

A “combination of road design, speed limits, enforcement and driving culture,” make it more risky to drive in some cities and states than others, said Robert L. Rabin, the A. Calder Mackay Professor of Law at Stanford Law School.

Differences in weather patterns, traffic congestion and crime are key underlying factors, too. “Often variations in rates are impacted by geography (and more specifically) weather,” said Susan A. Shaheen, co-director of the Transportation Sustainability Research Center at the University of California, Berkeley. Other important considerations include “city size and traffic congestion (which can contribute to higher accident rates), demographic variations in the average age of a metro area (younger drivers and older adults can be associated with higher levels of risk), and crime (both vehicle theft and vandalism).”

Next Steps for Drivers & Legislators

At the end of the day, it’s clear that most drivers could use a refresher course on car insurance. However, our priorities seem to be in the right place, and new tools are making it easier than ever to find the best car insurance at the lowest price.

There are several steps in particular that cost-conscious drivers can take to save on car insurance.

Take advantage of discounts. You may be able to get discounts if you are a veteran, get paperless statements, have a good driving record, bundle policies, are a student or have an anti-theft system, for example.

Build good credit. People with no credit pay 67% more than people with excellent credit on average.

Drive safely. Safe drivers with no history of accidents, tickets or arrests can look forward to cheaper rates than people who haven’t been as responsible.

Look locally. Plenty of car insurance companies only cater to customers in certain regions or states. These local insurers may provide lower rates but are often overlooked. Make sure to include them in your comparison, at least.

Choose a higher deductible. An insurer may lower your monthly rates in return for a lower deductible – the amount you personally have to pay when you make a claim. This approach makes the most sense for infrequent drivers.

Consider pay-per-mile plans. You don’t always have to pay a set amount per month. There are also plans based on how much you drive. The insurance company will place a device in your car that tracks your mileage. It may also track things like your speed and braking, which could affect your rates positively if you’re a safe driver and negatively if not.

Consumers are not the only ones with room for improvement, however. There are plenty of things state and local governments can also do to improve the car insurance landscape for their constituents.

“The most significant thing a state can do to promote inexpensive car insurance is require insurance companies to justify their rates and practices before they can raise prices on drivers,” said Douglas Heller of the Consumer Federation of America. “Since governments require that drivers purchase auto insurance, the government has a special obligation to ensure that prices are fair and affordable.”