Wednesday, March 24, 2010

car insurance in Maryland-raising of premium or cancellation

Online information makes much of our lives much more transparent. This includes our traffic and criminal records in Maryland which are available for the world to see on the Maryland judiciary web site. Car insurance companies peruse these lists regularly for their insureds. Based on what they find, they may be canceling insurance or raising the premiums. The question I sometimes receive is whether they can do this based on a disposition of probation before judgment. Probation before judgment in Maryland applies to many different types of criminal cases. It can apply all the way down to small traffic matters such as speeding and up to large criminal matters such as burglary. For purposes of this blog, it applies to the vehicle matters. It is my opinion that the bottom line is that they cannot raise your premiums based on a disposition of probation before judgment. However, they can cancel your policy for a probation before judgment.

The Maryland Insurance Administration “Consumer Guide to Auto Insurance” states as follows:



“NOTE: A “Conviction” includes a plea of nolo contendere and a finding of probation before judgment (PBJ). Maryland law specifically recognizes these exceptions for cancellation or nonrenewal…

However, compare, Insurance Article, Section 11-215 provides:



(e) For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21-202.1 or § 21-809 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16-205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16-117(b) of the Transportation Article.



and Section 11-318 provides:



(e) For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21-202.1 or § 21-809 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16-205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16-117(b) of the Transportation Article.

Please note, this only applies to a higher premium. The insurance company can cancel the driver under the policy even with probation before judgment. I believe that the below regulations make that more clear:

COMAR 31.15.10.03

E. Action Based on Criminal Conduct.

(1) In the case of private passenger motor vehicle insurance, standards that meet the business purposes standard and do not require statistical validation include a standard that allows cancellation or nonrenewal of coverage if the named insured or a covered driver under the policy is convicted of:

(a) Operating the motor vehicle while intoxicated, or impaired by drugs;

(b) Committing homicide, reckless endangerment, or criminal negligence arising out of the operation of the motor vehicle; or

(c) Using the motor vehicle to participate in a felony.

(2) If a named insured or covered driver is found guilty of a crime listed in §E(1) of this regulation, and the guilty finding subsequently is struck, and the final disposition of the matter is probation before judgment, the guilty finding:

(a) May be used as evidence that the named insured or covered driver committed the conduct listed in §E(1) of this regulation; but

(b) Is not conclusive proof that the named insured or covered driver committed the conduct listed in §E(1) of this regulation and may be rebutted by evidence showing that the insured or covered driver did not commit the conduct.

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