A group led by Baltimore City Council President Mary Pat Clarke has lost yet another effort to lower car-insurance rates in the city.
Baltimore Fair Auto Insurance Rate Inc. lost an appeal to force Insurance Commission John A. Donaho to hold another hearing on a rate increase for Allstate Insurance Co.
Baltimore FAIR's appeal was directed against a 3 percent increase granted to Allstate by the state Insurance Division last May.
Last week, Baltimore Circuit Court Judge Kathleen O'Ferrall Friedman held that the commissioner has the prerogative to determine if there should be a rehearing. Based on the information provided, Donaho made a reasonable decision not to reopen the Allstate case, the judge ruled.
She also noted that the General Assembly "has clearly indicated the territorial rate distinctions are lawful, and it would be a usurpation of the legislature's function for the court to intervene in the debate over territorial rating."
In the last year, Baltimore FAIR has run into brick walls in its efforts to get the insurance commissioner, Maryland's attorney general and the governor to denounce territorial rating practices by Illinois-based Allstate and other insurance companies.
Clarke said they will not appeal Friedman's decision on this point but rather turn their attentions to other court action to force the insurance commissioner to "uphold the law and end discriminatory territorial rating practices by insurance companies."
"I think we have been robbed, but we will put our energies into a major effort to end geographic rating," she said yesterday.
Clarke and others have been pressuring Donaho to reject
territorial rating, which results in Baltimore insurance premiums that are much higher than those in surrounding counties and nearly three times higher than those on the Eastern Shore.
Baltimore FAIR contends that territorial rating is illegal.
In its appeal of the Allstate case, it went even further and argued that the pattern of rate charges may be unfairly biased against blacks.
After nearly a year of hearings and two studies, Donaho in December ruled that territorial rating, the practice that allows insurance companies to base rates on where a driver lives, is legal and has a valid foundation.
When Clarke asked Gov. William Donald Schaefer to render his opinion on the matter, he refused to take a position on Baltimore car insurance rates.
In December, Maryland's Attorney General J. Joseph Curran Jr. confirmed that state law allows auto insurance to be priced according to where a driver lives.