Maryland Moves to Regulate Usage-Based Car Insurance

Maryland lawmakers are taking steps to regulate usage-based car insurance options to enhance data privacy for drivers. State Sen. Alonzo Washington has introduced legislation that limits driving data collection by insurers and mandates transparency around telematics usage. The proposed law aims to protect consumers from potential rate hikes and hidden biases in pricing, particularly impacting low-income and rural residents. Support has emerged from the Maryland Insurance Association, while insurers like State Farm express concerns over how the legislation might inhibit their use of telematics data, which they argue is essential for assessing driving risk and determining rates effectively.

The legislation comes amid a backdrop of rising car insurance rates in Maryland—the highest in the nation—averaging over $4,000 annually. A recent survey indicates that various factors contribute to these mounting costs, including increased vehicle thefts and regulatory changes. The proposed law is designed to enhance consumer rights in the insurance industry, aiming to set a precedent for other states. If passed, it could make Maryland a leader in telematics regulation and consumer protection within the auto insurance market.