The Maryland Automobile Insurance Fund (MAIF) — the auto insurance market of last resort in Maryland — said its Installment Payment Plan went online on Oct. 1. This new option, which was passed and signed into law earlier this year, gives MAIF policyholders access to an interest-free installment payment option for the first time in the Fund’s 40-year history.
Previously, Marylanders wishing to purchase an auto insurance policy from MAIF had only two options — to pay the policy in full at the time of purchase or to sign a loan agreement via a premium finance company, subjecting the customer to origination fees and interest.
MAIF said that while it took several years to be able to offer this installment payment option, it took considerably less time for Maryland drivers to take advantage of the program. MAIF said its first Installment Plan policy was purchased online by a customer in Laurel, Maryland on Oct. 1., just hours after the program launched.
MAIF Executive Director, M. Kent Krabbe described Tuesday as a “monumental” day in The Fund’s history.
“To see the public respond so quickly to this program validates what sponsors of this bill and consumer advocacy groups have said for years, that an interest-free MAIF installment payment option is something that Maryland drivers have desperately wanted and needed,” Krabbe said.
“I am excited for this great opportunity for all of those in Maryland who find themselves in need of MAIF and can now get a policy at a reasonable rate,” said state Sen. Catherine E. Pugh (D-Baltimore), a long-time advocate of an MAIF Installment Plan and sponsor of the legislation. “It makes our seven years of fighting worthwhile for the citizens of Maryland.”
MAIF estimates the installment plan will save policyholders an average of $250 over the term of a one-year policy compared to a premium finance agreement.
“By making the process of buying a MAIF policy more convenient and less expensive for Maryland drivers, we reduce the number of uninsured drivers on Maryland roads and make our state safer for all drivers,” Krabbe said.
MAIF was created by the Maryland State Legislature in 1972 for the purpose of providing auto liability insurance for those residents of the State of Maryland who are unable to obtain it elsewhere in the private insurance market. MAIF receives its operating funds from insurance premiums paid by policyholders, and receives no funding from taxpayers via the Maryland General Fund.
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