Paying for Auto Insurance

The vast majority of Maryland residents commute to and from work by car. Driving a car is one of the most convenient ways to travel around our state unless, of course, you have the luxury of living close to work. Unfortunately, most of our state does not have a plethora of pedestrian friendly options nor easily accessible public transportation. The result, as morning commuters will attest to, is a lot of cars on the roads. Owning a car is almost a necessity to commute through Maryland but having car insurance is a legal to necessity for driving a car. For families who live paycheck-to-paycheck, sacrifices are often made in the way of future expenses; namely, insurance.

Insurance on a Budget
There are many reasons why auto insurance is an unaffordable luxury for low-income drivers. For one, purchasing insurance requires proof of a valid driver’s license. This is an obstacle to the state’s undocumented and illegal immigrants. Another problem is the rating system used by insurance companies. Living in a highly congested area, as many low-income residents do, will cause an insurance premium to increase. Another factor taken into consideration when quoting insurance is whether the neighborhood is a high-crime area; more crime means a higher insurance premium. Perhaps one of the greatest obstacles to a reasonable insurance premium is a poor credit rating. A study done by the Consumer Federation of America showed that drivers with bad credit could end up paying an average of 127% more for an insurance premium than a driver with excellent credit.

The Problem with the Uninsured
When it comes to insurance the key is expecting the unexpected and preparing for it. The number of uninsured drivers across the country is staggering. According to the National Association of Insurance Commissioners the percentage of uninsured drivers on the road varies in each state from 5% to 30%. The financial losses in the United States due to uninsured motorists totals about $150 billion each year. The best way to protect against property damage and bodily injury going uncompensated is to purchase uninsured and underinsured motorists policies. Uninsured protects the party who is not at-fault for the accident even where the at-fault party has absolutely no insurance. Underinsured is a policy that protects the non-at-fault-party where the at-fault party’s policy is not enough to cover the damage.

Maryland Lends a Hand

Many states across the country are beginning to recognize the struggle that drivers face when they attempt to budget for pricey insurance premiums. Maryland legislators have created the Automobile Insurance Fund, which promises to provide coverage to those who have been rejected or cancelled by two other private insurance companies. As Cathy Nyce, director of marketing at the AIF, explained, “Frequently folks who are our policyholders are financially vulnerable. They’re making a decision every month whether to buy insurance or put food on the table.” The goal is to provide liability insurance to drivers until they are eligible for other, more complete, policies through a private company.
If you have suffered an injury after an auto accident in the state of Maryland, contact a skilled personal injury attorney today for a free consultation. We are happy to perform a consultation on your case.


Justin P. Katz
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Justin Katz is a personal injury lawyer who represents injury victims in Maryland, Virginia and Washington DC
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