Companies Ordered to Stop Charging Unlawfully High Finance Charges on MAIF Policies
In an interesting story about the seemingly ever rising cost of auto insurance in the state of Maryland, the Baltimoresun.com reports that Maryland Insurance Commissioner Ralph S. Tyler has ordered nine premium finance companies to stop charging unlawfully high finance charges to drivers who are insured by the Maryland Automobile Insurance Fund (MAIF). The order follows a yearlong investigation by regulators into the activities of the finance companies, which have been criticized by state lawmakers seeking to lower costs for consumers.
The Maryland Automobile Insurance Fund was created by the Maryland State Legislature for the purpose of providing automobile liability insurance for those residents of the State of Maryland who are unable to obtain it elsewhere in the private insurance market.
Many MAIF policyholders rely on premium finance companies because state law requires that the total annual premium for any MAIF policy be paid upfront, at an average cost of $1,700.00. For many drivers, pre-payment of their annual policy is simply not feasible and using a financing company is their only option.
In addition to ordering a stop to excessive finance charges, two of the companies must refund interest charged on policies that were never issued, due to refusal of coverage by MAIF or withdrawal of the policy by the consumer. It has been estimated that this order is expected to save consumers approximately $100.00 per year per policy used.
For more information about this subject please contact Meng & Alpert, LLC toll free at 866-444-6363.
