Maryland Auto Insurance is now offering an improved installment payment plan, which will allow more Maryland drivers to take advantage of the interest-free payment plan option.
This new plan is a result of legislation passed during the 2022 legislative session, and it has been approved by the Maryland insurance Administration.
The revised payment plan features a lower down payment of 18% and allows consumers to spread the cost of insurance over nine payments. Previously, Maryland Auto’s installment plan required a 20%-25% down payment and was limited to a maximum of six or eight payments, depending on the policy premium.
The requirement of a larger down payment made the prior plan inaccessible for some drivers and the legislature addressed this issue in the 2022 legislative session, by reducing the required down payment and expanding the number of payments.
The legislation that allowed Maryland Auto to revise its interest-free installment plan was sponsored by state Sen. Cory McCray, D-45.
“I am honored to have had the opportunity to sponsor this bill that helps remove added debt burden from financially challenged Maryland drivers,” said McCray. “The ability to drive a car goes far beyond simple convenience. It provides access to employment, childcare, fresh food and groceries, prescription drugs, schooling and much more---on our own terms. By removing arbitrary statutory barriers placed on Maryland Auto’s interest-free payment plan, more low-income drivers now have access to a payment option that reduces their initial insurance costs, lowers their monthly insurance cost by spreading payments over a longer period of time, and saves money over the course of their auto insurance policy term by eliminating interest. These changes benefit our most financially vulnerable residents.”
These new installment billing terms will apply to personal auto policies only and Maryland Auto anticipates expanding the program for commercial auto policies in early 2023. Other payment options, including pay in full (with an 8% premium discount) and financing through a finance company, will still be available.
“Our improved, interest-free installment payment plan will help to further Maryland Auto's mission of reducing the number of uninsured drivers on Maryland roads,” says Maryland Auto Executive Director Al Redmer Jr. “These changes will make it easier for consumers to take advantage of the interest-free plan that we offer.”
Source: Maryland Auto Insurance
