Q. MY RATE INCREASED
BECAUSE OF A CLAIM, AND
NOT A GENERAL RATE
INCREASE. I DON’T THINK I
WAS AT FAULT. IS THERE
ANYTHING I CAN DO?
A. General rate increases can be necessary for a
number of reasons and are not price gouging.
For example, insurers are impacted by rising
costs and inflation, just like other businesses
and Maryland residents have been. The cost of
repairs and parts have increased. The value of
used cars has gone up so the cost to settle a
total loss claim has increased. Business costs –
from the cost electricity to wages to the cost to
mail policy documents – have increased as well.
If an insurer expends more money than they
receive, they could become insolvent and
unable to pay claims. The MIA’s responsibility is
to make sure these companies stay financially
strong so they are able to pay claims. Another
factor that impacts rates is the requirement that
insurers maintain a reserve, that is funds held in
the event of a catastrophic loss, such as a
hurricane. Generally, these funds are invested
and the insurers earn money off these
investments. If the stock market is down, the
earnings from these investments are also down.
Again, to remain solvent and financially strong,
the insurers must increase their premium rates
to offset this loss in revenue.
800-492-6116 Toll-free
insurance.maryland.gov
Q. I STILL DON’T
UNDERSTAND WHY MY
RATES INCREASED. IT
SEEMS LIKE PRICE GOUGING
TO ME. WHAT EXACTLY
CAUSED THIS?
A. If you think your rate is being improperly
increased because, for example, you were not at
fault for the accident, you can contact your
insurance producer or insurer and ask them to
review the rate increase to ensure it is correct.
You may also file a complaint with the MIA
within 30 days of receiving notice from your
insurer that the premium is being increased due
to a claim or change in the insured’s driving
record, such as a ticket. For information about
how to file a complaint with the MIA, go to:
https://insurance.maryland.gov/Consumer/Pages/
FileAComplaint.aspx.
The directions (called a “Right to Protest”) will
also be included in the notice of premium
increase you should receive. Under state law, an
insurer is required to mail a notice of renewal
premium increase at least 45 days before the
renewal policy goes into effect. This notice may
be sent with the renewal package or separately.
If you file your complaint with the MIA on time,
the MIA will review the increase to make certain
that the increase and notice comply with the
law. A written determination will be issued once
the MIA’s investigation is complete. You will be
required to pay the premium amount being
billed while this investigation is being
completed. If it is later determined that the
increase is improper, the MIA will require the
insurer to reimburse you for any overpayment.
General rate increases can be
necessary for a number of reasons
and are not price gouging.