Maryland Auto Insurance Fund
Nov 22nd, 2011 by admin
MAIF stands for the Maryland Auto Insurance Fund, which is a state operated insurance pool for Maryland residents who are unable to obtain standard automobile liability coverage. It was created in 1972 for the purpose of eliminating the classic Catch-22 of a government mandate that all drivers carry insurance coupled with private companies’ ability to decline coverage to those deemed to be poor actuarial risks. This coverage hole is filled by MAIF.
Maryland’s approach is somewhat different from that of most other states, which handle uninsurable motorists through the use of a designated pool of drivers who are then randomly assigned (at higher rates) to an insurance carrier doing business in that particular state. In this way, insurance companies in other states can still find themselves required to insure drivers they originally declined coverage for.
In general, MAIF is a self-financing entity which depends on its rate structure for revenue, much like any other insurance company. MAIF does possess the ability to cover any annual operating deficit through an assessment upon the policyholders of all other automobile insurance companies in Maryland, but this assessment has been used rarely and has never exceeded a sum of five dollars per policy assessed.
One significant difference between MAIF and ordinary auto insurance policies is that MAIF cannot be sold on an installment plan. Its policyholders must either pay in full upfront or else make use of a third-party policy premium finance company. More than 1500 private insurance agents are authorized to sell MAIF policies, making it widely available to all qualified Maryland residents no matter in what part of the state they reside.
