Residual Markets, Uninsured Motorists and Competition in Maryland Auto Insurance

This PowerPoint report, presented at the Maryland Auto Insurance Plan Senate Hearing on Uninsured Motorists, provides a detailed look at the state’s private auto insurance market and the state’s residual market. As of 2013, 99 percent of all private passenger motor vehicles insured in Maryland are insured in the private market, leaving only 1 percent insured by the state’s residual market—the same as the U.S. market overall. The presentation begins with a complete analysis of the Maryland market, then puts it in context of what’s happening around the country, both historically and using the most recent data. It also looks at the status of uninsured motorists and proposes strategies for reducing the uninsured motorist population, including education, No Pay, No Play laws, enforcement and penalties. Maryland’s residual market population has experienced significant shrinkage in recent years (from 3.7 percent in 2004 to 1 percent in 2012), indicative of strong competition among private passenger auto insurers, however a small residual market is a critical part of a healthy, competitive private market.