Having options and finding affordable insurance is quite important to most people. No one wants to overpay for something that is required of them. Purchasing and keeping auto insurance in Maryland is not an option; forgo it and find yourself in both a financial and legal mess. It’s definitely worth it to pay for insurance and save yourself a headache, additional funds, or even a lawsuit later on. Fortunately, this guide to Maryland car insurance requirements can help you understand what to look for in order to make the best decision. 

Baltimore’s Mount Vernon neighborhood
Knowing Maryland car insurance requirements can help you find affordable options so you hit the road and visit Baltimore’s Mount Vernon neighborhood. Photo by Johnny Jet

Auto Insurance in Maryland 2020

Luckily for Maryland residents, the auto insurance rates for the state are less compared to the nationwide average of $1,470. That is $230 less on average to be more specific. In order to find the best cheap car insurance in Maryland, we must look at what is required by the state as well as factors that determine individual rate increases or decreases. 

Maryland Car Insurance Requirements

According to the Maryland Department of Transportation, the minimum legal requirements are as follows:

  • $30,000 bodily injury per person;
  • $60,000 bodily injury per accident;
  • $15,000 for property damage; and
  • Uninsured motorist coverage of at least $30,000/$60,000 for bodily injury and $15,000 for property damage 

Maryland’s UM coverage also includes Underinsured Motorist Coverage, which will help in a case where the at-fault driver has less coverage than your own Uninsured Motorist Coverage.  

  • $2,500 for Personal Injury Protection

PIP will cover medical expenses and lost wages when in an auto accident regardless of who is at fault. 

This is the minimum coverage, and each driver has the ability to increase their coverage based on their own individual needs. If you take out a loan to purchase your vehicle, your lender may require additional coverage. 

If you are interested in adding coverage, these are some of the options available in Maryland:

  • Comprehensive
  • Collision
  • Medical Payments
  • Rental Car Reimbursement
  • Transportation Expense Coverage
  • Towing and Labor Coverage

Before you even purchase your vehicle, look around at different insurance companies, know the coverages you need and want, check your credit report, and be informed on insurance trends and special factors in your state that may affect your rate. Let’s take a look at the largest versus the most affordable insurance companies in Maryland so that you can get an idea of what is out there. 

Largest Insurance Providers in Maryland

The five largest insurance providers in MD are State Farm, Geico General, Allstate, Geico (Government Employee), and Nationwide. By largest, they hold the most policies within the state. But does large mean cheaper? Some may say so, but let’s look at the facts.

The following are 12-month policy averages:

Maryland Car Insurance Requirements

Cheapest Auto Insurance in Maryland

As of February 2019, the following are considered the most affordable insurance companies in MD. You can compare these rates to those above and see that going with the more familiar or larger company won’t always save you money. 

As you can see from these visuals, none of the larger companies are considered the most affordable for the average person. There is quite a difference monetarily between the cheapest companies in both groups. 

Maryland Car Insurance RequirementsDiscounts Offered by Each of the Cheapest Companies in Maryland

  • State Auto: safe driver discount, multi-policy, accident prevention course, State Auto startup, driver training, anti-theft device, good student, multi-car, and pay in full 
  • Erie: Erie rate-lock, multi-policy, safety savings, youthful driver discount, and college credit
  • Penn National: multi-policy, pay in full, passive restraints, daytime running lights, anti-lock brakes, good student, student away from home, multi-vehicle, and driver education 
  • Liberty Mutual: homeowner, military, good student, student away from home, early shopper, advanced safety features, alternative energy, anti-theft device, accident-free, violation-free, RightTrack discount, multi-vehicle, preferred payment, pay in full, online purchase, and paperless 
  • USAA: safe driver, defensive driving, driver training, good student, multi-vehicle, vehicle storage, annual mileage, family discount, length of membership, and military discount 

Price Difference from Company to Company

Insurance rates can vary from company to company within the same state, sometimes very dramatically. Maryland car insurance requirements are no different. Why is this? There are a few reasons:

The cost of discounts

Certain companies offer more discounts than others. Some people are aware of these but many are not (unless they are told or they ask). It would be beneficial to compare a few companies and ask for a complete list of the discounts each offer.

Be sure to update your demographic information if anything has changed (i.e., marital status & location) as well as any other circumstance that may get you a discount. Forgetting to do so can cost you in the long run.

Choosing a company that uses credit scoring

This factor could either help or hurt your rate. If you have excellent credit, you will want to seek out an insurance company that includes credit scoring to determine the premium. However, if yours is sub-par, then you may want to go elsewhere.

Available perks

Everyone loves a good perk, but it may cost you to get them. Many auto insurance companies have “free” built-in options such as roadside assistance or bodily injury coverage for pets, yet you may technically be paying for this in your premium. 

Ability to combine policies to cut costs

Certain auto insurance companies offer homeowners or renters policies among other things. It is cheaper when you receive coverage for multiple things together than to separately cover them using different insurance companies or separate policies. 

Claim experiences and rate increases 

If an auto insurance company is obtaining too many claims and are not charging enough premium, they will typically raise their overall rates to cover those costs. 

When you are searching for the right company, be aware that there are various factors that come into play when insurance companies decide upon their rates, which are based on research and statistics, driver demographics, location, among other things. 

What Maryland Car Insurance Requirements Rates Depend On

The price you pay for insurance is dependent on several things. Some you may deem unfair, but believe it or not, there is adequate research involved in these deciding factors. The Maryland Insurance Administration also explains the following factors: 

Age

The younger the driver, the riskier. The average cost difference between a teen driver and a driver in their 50’s is over $1,000 for a 6-month premium. The same goes for older drivers. 

Driving History

If you receive multiple tickets and are accident-prone, you are a risk to insurance companies. Therefore, they are going to charge you more upfront. 

Credit Score

According to the Federal Trade Commission, drivers with poor credit file more claims than those with good credit. 

Years of Driving Experience

To insurance companies, you are less risky the more driving experience you have.  

Location

Certain states require specific types of coverage, which can, in turn, affect the cost. In addition, your zip code plays a fairly important role in determining your premium in that bigger cities often are higher than towns and rural areas.

Where you physically park your car makes a difference as well. Parking in a single-home garage is less risky than parking in an actual parking garage, outside, or on the street. 

Gender

Statistics show that male drivers exhibit more risky driving behaviors than females. There usually isn’t too big of a jump for being a male, but this is still a factor. 

Insurance History

If you are fickle about which insurance company you want to stay with or are the type of insurer who often allows your policy to lapse, the next auto insurance company will most likely frown on your inconsistent behavior. They want someone who will pay on time and stick with them.

Annual Mileage

This is a factor because the more miles you travel per year, the more you are on the road and at risk for something happening. The difference typically isn’t huge though and varies state by state.

Marital Status

You get a little perk for being married as married drivers are seen as taking fewer risks when driving. 

Claims History 

This is a big one and should be fairly obvious. The more claims you file, the insurance company is going to view you in one of two ways: risky or suspicious. 

Coverage Level 

Undoubtedly, the more coverage you have, the more money you pay. 

Additional Perks/Discounts Offered

Rates also depend on company-specific perks and discounts that they may offer. By asking the insurance company what they have, you could save quite a penny. 

Keep in mind that these are all factors you should be thinking about when getting an auto insurance quote. If your rate seems too high, look into these and see what may be going on.

Special Factors in Maryland that May Decrease Your Rates

Thankfully, the pros outweigh the cons of living in certain areas of MD as opposed to others regarding insurance rates. There are certain reasons why auto insurance in certain areas are cheaper than others: 

  • Favorable weather
  • Small population density
  • Low crime rates
  • Lack of dangerous intersections
  • Parking accessibility 

Summary

Thankfully, consumers have various options in Maryland and are fortunate to not be a state with one of the highest average rates in the country. Remember, it is not advised to go with the first insurance company you look into. It is also not recommended to choose a company because a friend or family member did.

Everyone is different and there are so many factors that affect an insurance rate.

Once you put in some leg work upfront, you should be able to find an affordable and individualized insurance policy that is just right for your needs. And if you’re in another state, we have other car insurance guides and resources to check-out.

Johnny Jet Editorial