New Auto Insurance Laws Take Effect in Maryland and Virginia
On July 1, 2024, significant changes to auto insurance regulations will be implemented in Maryland and Virginia, aiming to encourage drivers to obtain necessary coverage. These new laws are designed to address the issue of uninsured motorists and improve road safety.
Maryland Increases Penalties for Uninsured Drivers
Maryland is amending its penalties for driving without auto insurance, to be applied when the Motor Vehicle Administration (MVA) is notified of lapsed coverage on vehicles with active plates. The fines are assessed to vehicle owners and increase over time until proof of insurance is provided or the plates are returned to the MVA.
As of July 1, the penalty for the initial 30-day period will jump from $150 to $200. Accompanying this change, there’s an additional $7 penalty per day, compounding the cost. This legislation will also increase the annual maximum penalty from $2,500 to $3,500.
These penalties for uninsured motorists apply to each uninsured vehicle under a policy. This is the first adjustment to Maryland’s uninsured driver penalty fines in over thirty years.
Previously, the annual premium for a Maryland auto policy was often higher than the maximum uninsured driver penalty, disincentivizing drivers to seek insurance, and making fines seem cheaper. This law aims to reverse this trend, ensuring it’s more beneficial for drivers to obtain insurance, enforcing the state’s auto insurance requirements, and promoting safe driving habits.
Virginia Makes Auto Insurance Mandatory
Virginia’s new law mandates auto insurance coverage. Previously, drivers could pay an uninsured motorist vehicle fee to drive without coverage. Given that Virginia allows non-residents to register out-of-state vehicles in Virginia, a situation that many of the state’s neighboring drivers take advantage of, this new mandate hopes to encourage some of these drivers to register their vehicles in Maryland and obtain the required auto coverage.
Perspectives on the New Laws
Al Redmer, Jr., the Executive Director of Maryland Auto Insurance, shared his perspective:
These new laws will protect all drivers on the roads in our region from the risks and costs associated with accidents involving uninsured vehicles.
Maryland Auto Insurance, formerly the Maryland Automobile Insurance Fund, provides coverage to Maryland drivers who can’t obtain legally required auto insurance from the voluntary market.
Tips for Lowering Auto Insurance Premiums
While these laws focus on ensuring coverage, drivers may also look for ways to lower their premiums. Here are some tips from the Insurance Information Institute:
- Raise your deductible. Increasing your deductible from $200 to $500 can reduce collision and comprehensive coverage premiums by up to 30 percent. Raising it to $1,000 could lower premiums by 40 percent or more.
- Drop certain coverages on older cars. Consider dropping collision or comprehensive coverage on older vehicles.
- Combine insurance policies. Bundling auto and homeowners insurance from the same company can lead to discounts.
- Consider mileage. Drivers who travel fewer miles than average might be eligible for a discount.
- Compare car costs. Insurance premiums are influenced by a car’s price, repair costs, safety record, and the likelihood of theft.
- Safe-driver discounts. Discounts are often available for drivers with no moving violations or accidents in a specific period (e.g., three years), drivers aged 50-55, or college students not living at home.
