Auto insurers in Maryland are expanding their use of telematics programs, but regulators say a lack of transparency continues to raise questions about how these tools affect consumer premiums.
As per a report by the Maryland Insurance Administration, the number of policies using telematics in the state increased 45.5% from 2021 to 2023. While still a minority of the market, Insurance Commissioner Marie Grant (pictured above) said the growth reflects broader adoption by carriers and rising consumer awareness.
“Consumers often take advantage of these programs because they think that it will result in a more accurate measure of their risk and that they may see premium decreases,” Grant said, as quoted by Best Wire.
The results, however, are mixed. In 2023, 30% of enrolled policyholders saw their premiums decrease, 45% saw no change, and 23.6% experienced a rate increase. Grant said the distribution of rate outcomes will be closely monitored and emphasized the need for consumers to clearly understand how their behavior affects pricing.
Telematics programs typically track variables like mileage, braking, and acceleration to adjust premiums based on driving behavior. But Grant noted that differences in how insurers govern and explain these models can lead to confusion and frustration.
Policyholders have raised concerns over the lack of clarity in how rates are calculated, particularly when proprietary scoring models are involved. According to Grant, insurers often tell regulators they are unable to provide detailed information about how those models work or how scores are generated, citing confidentiality.
“That’s why we’re looking to have a broader discussion about how we can increase some of that transparency,” she said. “These can be great programs, but we also want to make sure that consumers truly understand the parameters.”
The Maryland Insurance Administration supported several provisions in Senate Bill 984, introduced earlier this year, which would have required insurers to disclose telematics use, established an appeals process for policyholders, and limited certain rate increases. The bill passed the Senate but did not advance in the House.
Without legislative action, Grant said, the administration is limited in its ability to mandate reforms around program governance or appeals.
The state’s private passenger auto market continues to be led by Berkshire Hathaway Insurance Group, State Farm, Progressive, Allstate, and USAA, which together accounted for nearly 75% of direct written premiums in 2024, according to BestLink.
