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 the date of mailing on the 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.