Md. Senate Committee Nixes Bill Forcing Insurers to Write on Coast

March 22, 2007

Maryland has decided not to require home insurers to cover all areas of the state, even coastal areas.

The state Senate was considering a bill to require the insurance after state’s second-largest home insurer — Allstate Corp.’s Allstate Insurance Co. — said last year it would stop writing new home policies in many coastal areas in Maryland.

Citing projections of more hurricanes and tropical storms in the mid-Atlantic states and north, Allstate added Maryland to the states where coastal home policies may no longer be written. Delaware and parts of Virginia also were included.

The bill would have prevented Allstate from writing any new policies if it wouldn’t write new ones near the coast. Insurance companies, including some of Allstate’s rivals, and state insurance regulators told senators last month that the bill was a bad idea.

The Senate Finance Committee voted 9-1 Monday to reject the bill. One of the lawmakers voting against the bill, Democratic Sen. Delores Kelley of Baltimore County, said the requirement could lead insurers to leave Maryland entirely.

A similar bill is pending in the House, though lawmakers seldom take up an idea after the other chamber rejected it.

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