Why is Auto Insurance So Expensive in Baltimore?

Last Updated on August 25, 2020

Drivers in Baltimore often complain about the price of car insurance. Due to several factors, some drivers in Baltimore pay relatively high rates for car insurance.

The average driver in Maryland pays $1,500 per year for car insurance, which is slightly higher than the nationwide average of around $1,350 per year. However, drivers in certain ZIP codes in Baltimore could pay $2,500 to $4,000 per year, on average, for car insurance.

Today, we’re explaining why car insurance is so expensive in Baltimore – including steps drivers in Baltimore can take to reduce the cost of car insurance.

Maryland Drivers Pay Average Rates for Car Insurance

Why is Auto Insurance So Expensive in Baltimore?First, it’s important to clarify that Maryland does not have notoriously expensive car insurance premiums. Instead, Maryland car insurance premiums are roughly average. It’s not the cheapest state for car insurance, but it’s also not the most expensive either.

The average American pays around $1,350 per year for car insurance. Drivers in the most expensive states pay more than $2,000 per year for car insurance, on average, while drivers in cheaper states pay around $900.

The average driver in Maryland, meanwhile, pays around $1,500 per year for car insurance. In most rankings, Maryland is the 20th to 30th cheapest (or 20th to 30th most expensive) state in America in which to insure a vehicle: it’s middle of the pack in most rankings.

However, Maryland is more than just Baltimore. While drivers in Maryland pay average rates for car insurance, drivers in Baltimore might pay higher-than-average premiums. The average driver in Baltimore pays higher premiums than the average driver in the United States and the average driver in Maryland.

Why Car Insurance is More Expensive in Baltimore

In most states, car insurance is more expensive in big cities than in smaller towns or rural areas. Baltimore is the biggest city in the state of Maryland, so it makes sense drivers in Baltimore pay higher rates for car insurance.

Car insurance companies aren’t discriminating against city drivers: they’re using statistics. Statistically, you’re more likely to make a claim in a big city than a rural area. A driver in Baltimore is more likely to get into an accident or make a claim than a driver in a smaller town or more rural area of Maryland.

This is a generality and it doesn’t hold true everywhere in Maryland. Insurance companies consider your ZIP code and other factors when calculating car insurance rates. Some drivers in Baltimore pay relatively high rates for car insurance, while others pay much cheaper rates than drivers in smaller towns or rural areas.

Some of the reasons car insurance is more expensive in big cities like Baltimore include:

More Traffic: Big cities have more traffic than smaller towns. More traffic means more cars on the road at all times of the day. That means more chances to get into an accident, more cars driving at high speeds close to another, and more insurance claims for insurers to handle.

Density: When there are more people in a small area, it increases the chances of making a claim. Generally, places with higher population density have higher crime rates. Higher population density also means more cyclists, pedestrians, and motorists on the road. Car insurance doesn’t just cover vehicle collisions: it also covers pedestrian accidents, cyclist collisions, and property damage.

Cost of Living and Repairs: Big cities often have higher costs of living than smaller towns or rural areas. When you repair a vehicle in Baltimore, it may cost $1,000 for labor when it only costs $600 in a rural area. Insurers pass these higher repair costs onto policyholders, leading to higher premiums.

Higher Crime Rates: Insurance covers theft, vandalism, break-ins, and other incidents. If your ZIP code has high rates of crime, then you might pay higher rates for car insurance. Some areas of Baltimore have high crime rates. If you park your car in these areas every night, you’re more likely to be a victim of vehicle theft or vandalism. Again, insurers pass this cost onto policyholders.

Other Factors that Impact Car Insurance in Baltimore

All of the factors above apply to any big city. Generally, drivers in big cities pay more for car insurance than drivers in small towns. However, there are also factors specific to Baltimore and Maryland that have raised the cost of car insurance in recent years.

Uninsured Drivers in Maryland: Approximately 1 in 8 drivers in Maryland does not have car insurance. Uninsured drivers raise costs for insurance companies, and Maryland is home to thousands of uninsured drivers.

Healthcare Costs: Healthcare costs have risen substantially over the last decade in Maryland and across the United States. Every year, healthcare costs for car insurance companies in Maryland rise about 7%, leading to higher premiums for drivers.

Severe Weather Events: Severe weather events are becoming more common. Winter storms, flooding, and other severe events raise costs for insurers.

Higher Cost of Living: Generally, cost of living rises over time. A mechanic that charged $1,000 for car repairs in downtown Baltimore might charge $1,200 today for those same repairs. Insurers pass the higher costs onto policyholders.

More Drivers: Maryland’s population is increasing, and that means more people are driving. When more people drive, it increases the chances of an accident or insurance claim.

How to Get the Cheapest Car Insurance in Baltimore

Just because you live in Baltimore doesn’t mean you have to pay high rates for car insurance. With a few basic steps, you can pay cheaper car insurance rates wherever you live in the city.

Here are some tips to pay cheaper car insurance premiums in Baltimore.

Compare Quotes: Some insurers like having city drivers in their insurance pool and reward these drivers with lower premiums. Other insurers discourage city drivers because they’re higher risk, so they charge higher premiums. Compare quotes online today – especially if you’ve stuck with the same provider for years. You may be surprised by how affordable car insurance can be by switching providers.

Move to a New ZIP Code: You shouldn’t move to a new ZIP code just to save money on car insurance. However, moving to a new ZIP code could cut premiums in half in Baltimore. Some ZIP codes have high rates of crime and traffic accidents, while others do not.

Take Advantage of Discounts: All Baltimore car insurance companies offer discounts. Most insurers offer bundling discounts or multi-vehicle discounts, for example. Others offer military discounts, student discounts, safe driving discounts, and claim-free discounts. By taking advantage of discounts, you can save hundreds per year on car insurance in Baltimore.

Final Word on Baltimore’s High Auto Insurance Rates

Maryland drivers pay roughly average rates for car insurance. Maryland isn’t the cheapest state for car insurance, but it’s certainly not the most expensive state either.

However, drivers in Baltimore often pay higher rates for car insurance because of various city-related factors. Baltimore is the biggest city in Maryland, and that means higher costs for car insurance companies. Statistically, drivers in Baltimore are more likely to make a claim than drivers in other parts of Maryland.

For all of these reasons, drivers in Baltimore may pay higher rates for car insurance. However, by comparing rates online today, you can pay the lowest possible rates for car insurance anywhere in Baltimore, Maryland.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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