Insurers' oversights will mean refunds for Maryland motorists

December 18, 1991|By Peter H. Frank

Maryland drivers could receive more than $10 million in refunds as their car insurers make up for a failure to pass along discounts for safety and anti-theft devices, the governor's office and state regulators said yesterday.

Hundreds of thousands of drivers could receive rebates of between $20 and $50, officials said.

So far, more than $5 million in mistakes have been found by auto insurers doing business in the state, according to insurance regulators, and some companies have begun mailing the rebates, often without explanation.

"I do not believe these oversights were the results of any concerted efforts on the part of insurers to overcharge the consumers," Maryland Insurance Commissioner John A. Donaho said in a statement. "In many cases, adequate questions were not asked and agents and brokers . . . were not always cognizant of the discounts."

Insurance companies frequently offer discounts to reward good drivers and provide an incentive for car-buyers to shop for safer cars.

However, Maryland regulators discovered that many times these discounts were not being passed along.

This round of mass rebates is the result of a routine examination two years ago by state insurance regulators, Mr. Donaho said. At that time, examiners noticed a large number of discrepancies between the discounts awarded and the number of eligible drivers.

Based on their findings, regulators notified the 65 largest insurers in the state to review their records.

State Farm Mutual Automobile Insurance Co., the largest insurer of private cars in Maryland with 547,500 policyholders, has identified 73,400 vehicles driven by their customers that are due the rebates, regulators said. (This refund is not related to $30.7 million in dividends State Farm is returning to Maryland customers because the company's costs were lower than anticipated.)

Nationwide Mutual Insurance Co., the third-largest insurer in Maryland with about 10 percent of the business, has located 10,000 vehicles that are eligible for the rebates.

Allstate Insurance Co., the second-largest car insurer here, is expected to conclude its study early next year, regulators said.

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