Proposed Legislative Bill Seeks to Clarify Requirements of Uninsured Motorist Coverage and Enhanced Underinsured Motorist Coverage

In Maryland, there are several requirements for motor vehicle insurance coverage.  These requirements are found in MD. CODE ANN., INS. § 17-103.  Per MD. CODE ANN., INS. § 17-103, at minimum, the security required for motor vehicles is:

(1) The payment of claims for bodily injury or death arising from an accident of up to $ 30,000 for any one person and up to $ 60,000 for any two or more persons, in addition to interest and costs; (2)  The payment of claims for property of others damaged or destroyed in an accident of up to $ 15,000, in addition to interest and costs; (3)  Unless waived under Section 19-506 of the Insurance Article or rejected under Section 19-506.1 of the Insurance Article, the benefits described under Section 19-505 of the Insurance Article as to basic required primary coverage; (4)  The benefits required under Section 19-509 or Section 19-509.1 of the Insurance Article as to required additional coverage; and (5)  For vehicles subject to the provisions of Section 25-111.1 of this article, the security requirements adopted under 49 C.F.R., Part 387.

Uninsured motorist (UM) or enhanced under-insured motorist (EUIM) coverage pays for costs associated with injuries and damages caused by uninsured motor vehicles and hit-and-run scenarios where a party is unable to identify the other vehicle(s) or driver(s) in an accident to ascertain whether they have insurance or not.

MD. CODE ANN., INS. § 19-509(c) outlines the coverage that is required for uninsured motor coverage in Maryland.  MD. CODE ANN., INS. § 19-509(c) provides:

Coverage required. --  In addition to any other coverage required by this subtitle, each motor vehicle liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall contain coverage for damages, subject to the policy limits, that: (1)  the insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident arising out of the ownership, maintenance, or use of the uninsured motor vehicle; and (2)  a surviving relative of the insured, who is described in Section 3-904 of the Courts Article, is entitled to recover from the owner or operator of an uninsured motor vehicle because the insured died as the result of a motor vehicle accident arising out of the ownership, maintenance, or use of the uninsured motor vehicle.

            Recently, a circuit court ruling interpreted MD. CODE ANN., INS. § 19-509(c) as not requiring UM or EUIM coverage to pay for the loss of use of the insured’s vehicle (this is typically reimbursement for the use of a rental car).  This reading of MD. CODE ANN., INS. § 19-509(c) diverges from how the Maryland Insurance Administration and many other private passenger automobile insurance companies interpret MD. CODE ANN., INS. § 19-509(c). 

Therefore, House Bill 144 has been proposed. The Maryland Insurance Administration requested the bill to clarify that UM and EUIM coverage must pay for the loss of use of the insured’s vehicle. Getting involved in a motor vehicle accident is a stressful experience.  Depending on the severity of the accident and the property damage incurred, those who are insured can be without their motor vehicles for days, weeks, or even months.  This bill would ensure that the added stress of having to worry about paying for rental car expenses out of pocket would be alleviated.

            House Bill 144 passed in the House on February 5, 2020 and is currently pending before the Maryland Senate.

--Letam Duson, Associate Attorney