Offering potential relief to long-suffering city motorists, Gov. Parris N. Glendening yesterday unveiled plans designed to make it easier and cheaper to buy private car insurance in Baltimore.
Proposed legislation would give incentives to major insurance companies to market their services as aggressively in the city as they do elsewhere across the state. A company that insures 10 percent of all Maryland drivers, for instance, would be expected to sell policies to at least 7.5 percent of all city drivers by 1998. If it did not, it would face financial penalties.
Governor Glendening said his initiative should bring competitiveness back to the city, where drivers pay premiums "two, three and even four times" the rates comparable drivers face elsewhere in Maryland.
"In the city, insurance is often not affordable and often not available from the private sector," Mr. Glendening said at an afternoon news conference at the World Trade Center downtown.
"The excessive cost is not only a financial burden to the city, but it helps drive middle-class families out of Baltimore," he said.
But lowering city rates artificially could result in raising rates for 11 drivers elsewhere -- at least that was the warning sounded yesterday by critics within the legislature and the insurance industry.
"Give people inside the Beltway a break and people outside the Beltway will pay," said Sen. Thomas L. Bromwell, D-Baltimore County, chairman of the Senate Finance Committee, which oversees insurance law. "It's like a balloon. You press in here, it comes out there. In this case, it comes out of everybody's pockets."
In a related move, Mr. Glendening proposed curbing a state program that insures high-risk drivers. The governor said too many good drivers are enrolled in the Maryland Automobile Insurance Fund (MAIF), the nation's only state-run auto liability insurer.
The program was created more than 20 years ago to underwrite people with poor driving records who were rejected by at least two private carriers.
But now MAIF has about 135,000 policyholders or 4.5 percent of all drivers in Maryland, making it one of the largest auto insurance providers in the state. Many of its policy holders have clean driving records and could be insured by private companies, Mr. Glendening said.
"The original intent has been lost," he said. "Maryland is running a large and bureaucratic insurance company. Selling insurance ought not to be our job."
