BALTIMORE, Feb. 28 /PRNewswire-USNewswire/ — The Baltimore Hispanic Chamber of Commerce, the Hispanic Business Association of Baltimore, The Montgomery County Hispanic Chamber of Commerce and the US Hispanic Youth Entrepreneur Education organization support Maryland House of Delegates Marvin Holmes’ sponsored House Bill 767. If passed, this legislation will make car insurance affordable for those who can only gain coverage from the Maryland Auto Insurance Fund (MAIF), the non-profit insurer of last resort. MAIF was founded in 1972 as a non-profit to serve the car insurance needs of those who have been turned down or canceled by other car insurance companies.
However, by law MAIF is not permitted to offer installment plans so customers must pay the full premium up front which is difficult if not impossible for most seeking coverage through MAIF. In fact, 96% of MAIF policies are written with premium financing.
If an individual cannot afford the premium up front, they must gain financing from companies who have set up shop for the sole purpose of financing MAIF policies. Not only do these finance companies charge rates as high as 30% per annum they collect all of their interest first. Once all of the interest is collected, they have no incentive to retain the customer. Sixty percent of MAIF cancellations are at the request of the finance companies. Once they are canceled, they come back to MAIF and pay again.
“This predatory lending practice needs to end. These finance companies are preying on individuals and communities that are struggling to survive,” said Luis Borunda, president & CEO of USHYEE. “As the numbers of uninsured drivers grows with today’s estimates at 680,000, it is important they we remove obstacles to obtaining affordable car insurance.”
US Hispanic Youth Entrepreneur Education
CONTACT: Juan Torrico of US Hispanic Youth Entrepreneur Education,+1-443-570-6093