Why Maryland Has the Highest Car Insurance Rates in the Nation

Maryland holds the top spot for the most expensive car insurance in the United States, with average full-coverage premiums soaring to $4,093 annually—more than double the national average. Surprisingly, the state’s high rates can’t be pinned on road fatalities or litigation frequency, which are relatively low compared to states like Mississippi or Florida. So why are Maryland drivers paying such a steep price?

The answer lies in a complex mix of risk factors. Urban density plays a key role, with most residents commuting through congested metro areas like Baltimore and the D.C. suburbs. This traffic congestion leads to frequent minor accidents and a high volume of claims. Compounding the issue are costly repairs, driven by modern vehicle technology and the region’s higher labor costs. Add to that Maryland’s exposure to extreme weather events, including flooding and hurricanes, and you have a recipe for inflated premiums.

Despite having fewer lawsuits than other high-cost states, Maryland sees a significant number of insurance claims overall, which insurers factor into rate calculations. Looking ahead, experts predict further premium hikes—up to 7% by the end of 2025—as inflation and repair costs continue to rise. While recent tariff reductions on imported auto parts may offer some relief, their impact remains uncertain.

One potential option for cost-conscious drivers is usage-based insurance (UBI), which rewards safe and low-mileage drivers with discounts. While UBI programs offer savings of 10% to 30%, they’re not a universal solution. Maryland’s high rates reflect deep-rooted structural challenges—urban sprawl, weather exposure, and a high claim volume—that will take time and policy innovation to address.