Maryland Insurance Administration Issues 2011 Report on the Use of Territories as a Rating Factor in Establishing Private Passenger Automobile Insurance Rates
Jun 10, 2011
The Maryland Insurance Administration has issued its 2011 Report on the Use of Territories as a Rating Factor in establishing private passenger automobile insurance rates to the Maryland General Assembly.
This annual, statutory report contains information on the number of insurers actively engaged in providing private passenger automobile liability insurance in Maryland, and the number of those insurers that use territory as a factor in establishing automobile insurance rates.
Territorial rating is the practice of auto insurance companies factoring in the principle place a driver garages his vehicle when setting auto insurance rates. An insurer uses data showing auto losses (such as accidents and thefts) by geographic location to establish the rating territories. Auto insurance rates in dense urban areas tend to be higher than in more rural areas because of traffic congestion, road configurations (roads in older cities may not have been planned with cars in mind), crime rates and accident rates. Actuarial studies have found where a person garages his vehicle is the most accurate prediction of loss, while an individual’s driving history is among the least predictive because the average driver has so few claims over his lifetime
To access the report, go to:
http://www.mdinsurance.state.md.us/sa/documents/2011Report-TerritoriesPPARatingFactor.pdf