Maryland regulators point to repair, reinsurance and underwriting shifts as drivers of rising auto and homeowners premiums

The Maryland Insurance Administration told members of the Economic Matters Committee that rising repair costs, higher reinsurance prices and shifts in underwriting are the main drivers behind recent increases in private passenger auto and homeowners insurance premiums.

Marie Grant, acting insurance commissioner, opened the briefing and said the agency plans to use its existing authority to scrutinize filings and study affordability across Maryland. "We do have authority in this space," Grant said, adding the agency has a new actuary on its property-and-casualty team to ask "harder questions" about rate filings.

The agency's deputy insurance commissioner, Joy Hatchett, explained how rates are set and why consumers see different premiums. "Premiums are based on future projections," Hatchett said, describing how insurers use actuarial models that factor in past losses, expected repair costs, operating expenses, producer commissions, taxes and the cost of reinsurance. She added that insurers typically file a proposed rate and then may begin charging it under Maryland's file-and-use framework while regulators review it.

Why it matters: Committee members pressed regulators on what they can do for consumers facing steep increases and on how national events — such as the homeowners market disruption in California — can affect Maryland policyholders. Grant said the MIA will take a deeper look at affordability and consider whether additional…