Actuarial Discrimination

January 2005 / Abell Reports / Community Development

City residents pay up to198% more for car insurance than county residents. The facts, the consequences, and recommendations for resolving the problem.

Consider two 30-year-old women. Each is single and has an unblemished driving record. Each drives to work in a 2002 Toyota Camry insured by Geico General Insurance Co., one of the largest insurers in Maryland. One woman pays $798 annually for her insurance policy; the other pays 70 percent more – $1,359.

The 70 percent difference in cost stems from a single factor – where the two women live. The first woman lives in Timonium, two miles outside the Baltimore Beltway. The other lives nine miles to the south, in Charles Village, a rowhouse community in North Baltimore.

For tens of thousands of drivers in Baltimore City, such numbers are part of a distressing financial reality: Automobile insurance is far more expensive for Baltimore City residents on average than for other Maryland drivers.

For example, a two-car family in north-central Baltimore City will pay at least $2,399 for insurance; the same family could get the same coverage for as little as $1,626 if it lived in Cockeysville, or as little as $1,385 in Carroll County.

Drivers who live just inside the Baltimore City limits can pay hundreds of dollars more than neighbors across the street who happen to live in Baltimore County. Even within the city of Baltimore, there can be tremendous premium variation. Depending on which side of Charles Street they live on, residents near Loyola College can save hundreds of dollars a year on their insurance, simply because their house falls in a certain zip code.