Posted by: Adam McCann

When it comes to Maryland, big things really do come in small packages. In 2011, the Free State charged the tenth most expensive car insurance premiums in the country. That’s despite having little road to cover (17,000 lane miles), one of the lowest rates (315) of traffic-related fatalities (315) and minimum liability insurance limits just slightly higher than the national average. Maryland drivers must carry at least $30,000 of coverage per person and $60,000 per accident for bodily injury and $15,000 for property damage.

So what’s boosting the cost?

In this report, WalletHub dug deeper into the cost of premiums by using data collected from five of the largest auto insurers in the state (with a cumulative market share of 90.58%). The results reveal how individual factors such as gender, age and coverage type can impact a driver’s overall rate.

1. Key Findings
2. Geographic Impact
3. Demographic Impact
4. Auto Usage Impact
5. Type of Coverage Impact
6. Driving Record Impact
7. Premium Differences by Credit Score
8. Regional Characteristics Correlated with Maryland Car Insurance
9. Customer Satisfaction and Market Share
10. Methodology

Key Findings

  Embed on your website<a href="http://bit.ly/2WYQ0gc"> <img src="//d2e70e9yced57e.cloudfront.net/wallethub/images/posts/8475/2014_car_insurance_maryland1.png" width="700" height="1153" alt="2014 Maryland Car Insurance" /> </a> <div style="width:700px;font-size:12px;color:#888;">Source: <a href="http://bit.ly/2QXC2FF>

Geographic Impact

Premium Differences by City – The most expensive city is 85% more expensive than the least expensive

1= Least Expensive

 

Rank	City	Premium Relative to Baseline		Rank	City	Premium Relative to Baseline
1	Dundalk (baseline)	100.0%		16	Glenarden	123.8%
2	Colesville	100.8%		17	Ellicott	125.9%
3	Lake Shore	100.9%		18	Pikesville	125.9%
4	Germantown	101.0%		19	Hyattsville	128.2%
5	Glen Burnie	101.1%		20	Millersville	132.1%
6	Takoma Park	103.0%		21	Rockville	136.4%
7	Columbia	103.9%		22	Silver Spring	138.5%
8	Montgomery Village	104.3%		23	Cheverly	140.5%
9	Gaithersburg	111.2%		24	Bel Air	144.2%
10	Frederick	114.0%		25	Bethesda	151.6%
11	Bowie	115.4%		26	Waldorf	157.8%
12	Salisbury	117.3%		27	Lanham	158.3%
13	Laurel	118.9%		28	Upper Marlboro	158.9%
14	Hagerstown	119.2%		29	Temple Hills	164.7%
15	Annapolis	122.1%		30	Baltimore	185.4%

*The lowest premium was observed in Dundalk, it was used as a baseline as a result. The baseline value is $1,198.64 /year

Premium Differences by City Size – Large cities are up to 32% more expensive than small cities

*The lowest premium was observed in the small cities group, it was used as a baseline as a result. The baseline value is $1,456.83/year. Small City – Population of less than 100,000; Medium City – Population between 100,000 and 300,000; Large City – Population of more than 300,000.

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Demographic Impact

Premium Differences by Gender - Males pay ~1% more

*The lowest premium was observed in the female group, it was used as a baseline as a result. The baseline value is $1,414.24/year

 Premium Differences by Age – 16 year olds pay 350% times more than 56 year olds

*The lowest premium was observed in the 56 years old group, it was used as a baseline as a result. The baseline value is $1249.27/year. Premiums do not include quotes from Geico and Allstate

 

Premium Differences by Marital Status – Single individuals pay 5% more

*The lowest premium was observed in the married group, it was used as a baseline as a result. The baseline value is $1,341.63/year

 Premium Differences by Profession – Engineers and teachers enjoy a discount of 7% relative to other professions

*Baseline profession - represents the types of jobs that are not eligible for discounts. The baseline value is $1,414.24/year

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Auto Usage Impact

Premium Differences by Type of Use– Small business owners pay 16% more on car insurance

*The lowest premium was observed for commuting to work/school group, it was used as a baseline as a result. The baseline value is $1414.24/year. Premiums do not include quotes from State Farm

 

Premium Differences by Mileage – No big differences

*The lowest premium was observed in the 6,000 miles group, it was used as a baseline as a result. The baseline value is $1,345.66/year

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Type of Coverage Impact

Premium Differences for Comprehensive & Collision Coverage – Adding coverage can increase your car insurance costs by 74%

*The lowest premium was observed in the no coverage group, it was used as a baseline as a result. The baseline value is $813.10/year

 Premium Differences by Liability Coverage – Deluxe coverage costs 128% more than the state’s minimum requirement

*The lowest premium was observed in the minimum coverage group, it was used as a baseline as a result. The baseline value is $748.37/year

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Driving Record Impact

Premium Differences Based On Driving Violations – DUI increases costs the most, on average around 88%

*The lowest premium was observed in the no violations group, it was used as a baseline as a result. The baseline value is $1,414.24/year. Premiums do not include quotes from Allstate and State Farm for DUI

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Premium Differences by Credit Score - Up to 58% more for people with no credit *The lowest premium was observed in the good credit score group, it was used as a baseline as a result. The baseline value is $1,991.95/year, zip code used was 21224. Source: WalletHub’s Car Insurance by Credit Score Report

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Regional Characteristics Correlated with Maryland Car Insurance

 

 

	Lowest	Highest	∆ Highest vs Lowest Premium Difference	Correlation Factor
Travel Time to Work (in minutes)	Salisbury(21.0)	Waldorf(44.4)	35%	0.03
Fatality Rate	Carroll County(2.90%)	Prince George's County(16.10%)	28%	0.22
Hispanic Pop	Baltimore(2.11%)	Hyattsville(55.99%)	-32%	-0.33
African American Pop	Dundalk(3.68%)	Upper Marlboro(89.38%)	66%	0.30
Asian Pop	Baltimore(0.82%)	Rockville(23.20%)	-39%	-0.20

*Correlation factor for each metric is calculated across the 30 largest cities in Maryland

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Customer Satisfaction and Market Share

Company	Market Share	Complaints Index	WalletHub User Reviews	The Overall Customer Satisfaction Rank
Geico	9.00%	0.70	4.3 (120 reviews)	1
State Farm	21.85%	0.48	4.3 (429 reviews)	2
Allstate	4.94%	0.84	4.3 (101 reviews)	3
Nationwide	5.45%	0.58	4.4 (227 reviews)	4
USAA	12.79%	0.90	4.3 (176 reviews)	5
Erie	19.47%	1.36	4.4 (351 reviews)	6
Progressive	7.19%	1.10	4.8 (143 reviews)	7
Liberty Mutual	6.90%	N/A	4.4 (51 reviews)	N/A
Travelers	0.09%	1.59	N/A	N/A
Hartford Casualty	1.21%	1.87	4.9 (8 reviews)	T - 10
Horace Mann	1.62%	5.57	4.8 (38 reviews)	T - 10
Cumberland	0.05%	N/A	N/A	N/A
Privilege Underwriters	0.02%	N/A	N/A	N/A

*Source: Maryland Insurance Administration, 2013. Reviews data is accurate as of 10.20.2014

The complaints index is the ratio between the market share of complaints divided by the market share of premiums written. The lower the index, the better.

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Methodology

In order to examine how auto insurance premiums vary within Maryland, we collected insurance quotes from the websites of five of the largest providers in the state. The five insurance providers were chosen based on the total number of premiums issued in 2013, according to the Maryland Insurance Administration. USAA was excluded from our analysis because its customer base is limited to military personnel and their families.

City Data Assumptions:City Selection:We chose the 30 most populated cities, according to U.S. Census Bureau data.City Zip Code selection:For each quote, we were required to enter a zip code on the insurer’s quoting platform. For each city we picked the zip codes with the highest population, so that on a cumulative basis those zip codes represent more than 30 percent of the total population of that city.

For all demographic and insurance details data across the report, we have used the 21740 zip code, unless specified otherwise. The average premium amount across all cities for the base case scenario is closest to the average premium obtained for this zip code; as such it was chosen as to represent average fluctuations between the different factors.

Assumptions of the Base-Case Driver and Automobile

Base Case – Experienced Female Driver
2013 Honda Accord
	DRIVER CHARACTERISTICS:
	Licensed: 20 Years
	Age: 36 Years
	Employment Status/Profession: Unemployed
	Marital Status and Gender: Single Female
	Membership in Organization: None
	Traffic Violations: None
	Annual Mileage: 16,000
	Daily Use Purpose: Commute to School/Work (20 Miles Each Way)
	Days per Week: 5
	COVERAGE:
	$50,000 for Injury/Death to One Person
	$100,000 for Injury/Death to More than One Person and $50,000 for Damage to Property
	Collision Coverage with Uninsured Motorist of $30,000
	Collision Coverage with Underinsured Motorist of $60,000 (UMUND)
	$500 Collision Coverage (COLL)
	$500 Comprehensive Coverage (COMP)
	VEHICLE CHARACTERISTICS:
	2013 Honda Accord LX, 4-Cyl., Sedan
	Assume: driver-side air bag, standard performance, no anti-theft device

In order to obtain comparable results across different scenarios, we kept the car information the same for each quote. Starting with the above base case, we altered the parameters one at a time and extracted the resulting quotes to outline the differences across gender, marital status, age, profession, annual mileage, daily use of car and credit score.

For traffic violations and Liability coverage, full details were not included in the above charts for simplicity sake. They are as follows:

Traffic Violations from the Past 36 Months:

• 1 Speeding Ticket, 1–19 Miles Over Limit (3 Months Ago)
• Reckless Driving – 1 Speeding Ticket, 20+ Miles Over Limit (3 Months Ago)
• Improper Turn/No Signal (3 Months Ago)
• DUI (12 Months Ago)
• 1 Accident, No Casualties, $1000+ Claim (12 Months Ago)
• 1 Accident, No Casualties, $1000+ Claim (3 Months Ago)
• Clean Driving History (Base Case)

Liability coverage:

• Minimum: Mandatory state minimum liability limits for Maryland: $30,000 per person and $60,000 per accident for bodily injury, $15,000 for property damage and no collision or comprehensive deductible.
• Basic: $50,000 per person and $100,000 per accident for bodily injury, $50,000 for property damage, $500 collision and $500 comprehensive deductible
• Premium: $100,000 per person and $200,000 per accident for bodily injury, $100,000 for property damage, $1500 collision and $1500 comprehensive deductible
• Deluxe: $100,000 per person and $300,000 per accident for bodily injury, $100,000 for property damage, $1500 collision and $1500 comprehensive deductible

Company Data Assumptions:

List of Insurance Providers: The ideal list of providers includes the top 20 with the highest market.

Complaints Index: The complaints index was obtained by dividing the total complaints for each individual company by the total number of complaints across all insurance companies in Maryland (complaint market share), all divided by total market share. The Overall Customer Satisfaction Rank was determined by averaging the rankings for the Complaint Index and WalletHub User Review categories.

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