Efforts to create a non-profit insurance company for Baltimore city drivers got a boost today when the city government provided $26,000 for a feasibility study.
"We want to make sure this feasibility study is done," said Mayor Kurt L. Schmoke at a meeting of the Board of Estimates.
The City Wide Insurance Coalition, a group formed a year and a half ago to create such a non-profit insurance operation, has been campaigning for the feasibility study for more than a year. "It's a big step forward," said CWIC President A. Robert Kaufman.
He credited the group's success in getting the funding to support from the Interdenominational Ministerial Alliance and the Baptist Ministerial Alliance and recent television and newspaper editorials supporting the effort.
The goal of the CWIC is to create either a non-profit or quasi-government insurance operation that would offer insurance for much less than private companies charge.
The city had agreed during the summer to provide half of the $52,000 needed to do the study. CWIC so far has raised about $17,000 of the other $26,000, Kaufman said. But instead of waiting until the full amount is raised, Schmoke said he decided to release the city's portion early. "It was my view that we could help in fund raising if we release these funds at this time," he said.
The money will be paid to R&B Inc., a business consulting firm, and to the Morgan State University Institute for Urban Research.
With the money from the city and that raised so far, the study will begin almost immediately, said Avis L. Ransom, president of R&B. She said it will take about six months to complete. Interim reports will be issued before that.
Besides assessing the possibility of creating a non-profit group, the study will also look at the issue of territorial rating, the insurance practice that results in urban drivers paying higher rates than those in rural and suburban areas.
"It seems the insurance industry wants to penalize people for living in Baltimore," said the Rev. Sidney Daniels, president of the Interdenominational Ministerial Alliance, in accepting the money from the city.
CWIC, which was established in June 1989, is one of a number of organizations that have been formed in recent years in response to rising insurance rates in the city.
Another group is Baltimore Fair Auto Insurance Rates, which is trying to challenge the legality of territorial rating. City Council President Mary Pat Clarke, who heads FAIR, said that her group also hopes to use the feasibility study in its efforts.