Insurance companies doing business in
Maryland must offer an Enhanced UIM policy to drivers that will provide greater
protections in situations where an at-fault driver does not have insurance or is underinsured. This new type of
coverage is intended to bridge a “gap” that exists when an insured driver is
injured by another, and that insured driver attempts to utilize the full
benefits of his or her own UIM coverage.
Historically, Underinsured Motorist (UIM)
coverage was intended to help protect insureds injured by negligent drivers who were either uninsured or underinsured. In the situation where an at-fault
driver’s insurance coverage was insufficient to pay an injured person’s damages
in full, the injured person’s UIM coverage kicked in to provide compensation to
the accident victim. The injured person could only recover damages within his/her UIM coverage limits.
For example, an injured insured has UIM
coverage limits of $100,000.00 and the at-fault driver has the minimum required
coverage in Maryland of $30,000.00. If the medical expenses, lost wages, and
non-economic damages total to $200,000.00, the injured insured would only be able
to receive $100,000.00 of compensation ($30,000.00 from the at-fault driver’s
liability policy and $70,000.00 from the injured insured’s UIM policy). Under the new law, the injured insured’s
compensation would be capped at $130,000.00.
The injured insured would be able to receive the full 100,000.00 of
his/her UIM policy.
Insurance companies are now required to
offer this to new policy holders who have purchased insurance after July 2018.
Currently, insurance companies do not have to offer it to an insured who
is renewing his/her policy. In the case of an insured renewing his/her
policy, he/she would have to opt-in
to the EUIM.
This enhanced UIM coverage is offered to
private motor vehicle insurance policies, which includes motorcycle policies,
but does not apply to commercial insurance policies.
-Tara McDowell, Associate Attorney
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