USF&G lowers auto insurance rates statewide

April 09, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Benefiting from a drop in auto claims and hoping to expand its minuscule portion of the Maryland auto insurance market, USF&G Corp. has lowered automobile rates by an average of 12 percent statewide, including an 8 percent cut in Baltimore.

"This is USF&G's backyard, and we really would like to become a market force," said Gary L. Roth, vice president and branch manager in Baltimore for the company's automobile subsidiary, United States Fidelity and Guaranty Co.

The new rates, which have been approved by the Maryland Insurance Administration, became effective yesterday. The decreases range from 8 percent in Baltimore to 18.1 percent in the Hagerstown area.

Despite being based in Baltimore, USF&G has been a minor player in the state's automobile insurance market.

In 1992 it ranked 22nd in the state, receiving only 0.7 percent of the total auto premiums paid in Maryland, according to A. M. Best Co., an insurance rating firm. It has a total of 7,544 auto policies in the state, including 682 in Baltimore, according to USF&G.

But the company sees Maryland as fertile ground for growth, Mr. Roth said. "With this rate decrease, we hope it will grow to be more than 1 percent [of the market]," he said.

The rate reduction is made possible by a drop in claims in the last 18 to 24 months, Mr. Roth said.

He attributes the drop to various company initiatives in the last two years. These include a beefed-up in-house legal team, a new fraud unit and a quick-response 800 telephone line that reduces the likelihood that a customer will resort to legal action, Mr. Roth said.

State Farm, Maryland's largest auto insurer, with 17.8 percent of the business, lowered its rates by an average 2 percent a year ago. Nationwide, the state's fifth-largest insurer, dropped its rates by 3.5 percent in the last year, and Erie Insurance Exchange lowered rates by 2 percent early this year.

GEICO, which offers some of the lowest rates in the state, bucked the general trend and had a 3.1 percent average increase in September.

USF&G RATE CHANGES

USF&G announced yesterday it has lowered its personal auto insurance rates an average of 12 percent in Maryland. Listed here is the annual premium for a husband and wife, both 45, both with good driving records, who own a 1989 Chevrolet and 1991 Honda Accord. Both cars are insured with liability, collision and comprehensive coverage, and both drivers have daily 10-mile commutes. Actual rates will vary from person to person.

City/area.. .. .. .. Old rate.. .. .. New rate.. .. ..% change

Baltimore.. .. .. .. $2,813.. .. .. ..$2,588.. .. .. .. -8.0%

Hagerstown.. .. .. .. 1,257.. .. .. .. 1,030.. .. .. ...-18.1

Cambridge.. .. .. .. .1,236.. .. .. .. 1,111.. .. .. ...-10.1

Glen Burnie.. .. .. ..1,743.. .. .. .. 1,546.. .. .. .. -11.3

Bethesda.. .. .. .. ..1,487.. .. .. .. 1,294.. .. .. .. -13.0

Hyattsville.. .. .. ..2,113.. .. .. .. 1,762.. .. .. .. -16.6

Bowie.. .. .. .. .. ..1,676.. .. .. ...1,510.. .. .. ...- 9.9

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