In ruling yesterday that it is legal for insurance companies to set auto insurance rates on the basis of where a driver lives, state Insurance Commissioner John A. Donaho eliminates one option for relief from high insurance rates long suffered by Baltimore city residents. Fortunately, there are other options for reform available.
The legislature is set to consider allowing insurers to offer "no fault" insurance policies when the General Assembly opens next month, which promises significantly lower rates in exchange for accident victims' giving up their right to sue for so-called "pain and suffering" awards. Meanwhile, a Baltimore area citizens' group is studying the possibility of creating a public, non-profit company to make insurance more affordable. Still other options include Sen. John Pica's proposed legislation to make insurance commissioner an elective office, and City Council President Mary Pat Clarke's plan to seek judicial relief.
One way or another the present rate system based on geography must go. When liability insurance is required by the state as a condition for driving it more resembles a tax than a simple business transaction. No one would defend a practice of, let us say, charging Baltimore residents two or three times as much for their auto license plates as other residents pay. Why should mandatory insurance rates be any different?