MAIF: An overview of the Maryland Automobile Insurance Fund

MAIF, or the Maryland Automobile Insurance Fund, is the only insurance company in Maryland that is actually an independent agency of the State. As such, it reports directly to the Governor of Maryland and accountable to the Maryland State Legislature, which created the Fund in 1972. MAIF is governed by law in Title 20 of the Insurance Article of the Annotated Code of Maryland. However, it receives no state funding and its responsibilities and liabilities are not assumed by the State of Maryland. It operates as its own entity.

MAIF’s purpose is to provide automobile liability insurance for Maryland state residents who are unable to obtain it from private insurers for any number of reasons. Primarily, the reason is that they are high-risk. Usually they have sub-par driving records and/or a high incidence of accidents and insurance claims. In order to qualify for insurance through the Fund, a driver must have been rejected by at least two private insurance companies in Maryland or have had automobile insurance cancelled or non-renewed by any reason besides failure to pay the premium.

Maryland is a compulsory insurance state, meaning that it requires all registered vehicles in the state to be insured with at least the following liability coverages: $20/$40k in bodily or personal injury, $15k in property damage and $2,500 in economic loss coverage. The State created this Fund in an attempt to substantially reduce the number of its resident uninsured motorists.

MAIF cannot refuse a Maryland resident automobile insurance coverage for any other reason but non-payment of the insurance premium. No matter what a person’s driving history is, they can get an insurance policy with all of the state-required minimum limits through the Fund so long as they can pay the premium. The Fund acts as any other private insurance company in Maryland and is thus subject to regulation by the Maryland Insurance Commissioner.

In 2006, MAIF was the sixth largest writer of private passenger automobile insurance in Maryland (Wikipedia). The Fund writes less than 5% of the automobile insurance policies in Maryland, but since their drivers are statistically higher risks than the general populace, the amount of accident claims that those drivers generate is disproportionately much higher. Since the policy limits are so low, MAIF is never hit with a huge claim payout no matter what the nature of the personal injury. There is almost always an Underinsured Motorist policy (please review our UM/UIM webpage) to back them up with both additional liability coverage and money to help pay for lawsuit defense costs. Some personal injury attorneys feel that this gives the Fund the confidence to take a very aggressive stance when negotiating personal injury claim settlements.

Since the Maryland Automobile Insurance Fund is not actually funded by Maryland, its income is generated by insurance premiums, investment earnings, funds recovered from uninsured motorists by the Uninsured Unit, and a portion of the penalties imposed by Maryland’s Motor Vehicle Administration against uninsured motorists (Maryland Code Transportation Article, sections 17-101 through 17-110; Maryland Insurance Article sections 20-101 through 20-701).

The Maryland Automobile Insurance Fund is advised by a Board of Trustees. Five of the board members are members of the insurance industry and the other seven are appointed by the Governor of Maryland. The executive Director is a member of the Board and oversees day-to-day operations. Operating units include Administration, Information Systems, Human Resources, the Fiscal Department; the Claims Department, which is responsible for handling all claims; and the Underwriting Department, which is responsible for issuing policies according to eligibility requirements mandated by the Annotated Code of Maryland.

MAIF is a community-minded organization and does have a Community Outreach Program that works with business and elected leaders, as well as schools and civic organizations.

If you have even worked for MAIF or had a policy with them, our readers would love to hear from you. What did you think about the company? What did you like or dislike about it. How was the customer service. Please share your insights or personal story with the rest of our insurance community. Just fill out the web-form below to get started. Thank you.

This article is written for informational purposes and is not intended to take the place of competent local legal counsel. The writer is not associated with this insurance company or any of its affiliates. This website does not endorse any specific automobile insurance company over another.

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Other articles that might interest you:

An Explanation of the Insurance Company's Claims Process

Why Bother with Buying Automobile Insurance?

What To Do When You Have Been Involved In An Accident

First Party Insurance Coverages vs. Third Party Insurance Coverages

An Explanation of Uninsured/Underinsured Motorist Coverages

GAP Coverage Explained

An Explanation of the Personal Umbrella Policy (PUP)

What is an Insurance Lienholder?

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