Maryland Auto Insurance Laws
Maryland, like almost every other state in the country, has laws that require all drivers on the road to have auto insurance. But unfortunately, not everybody follows the law and there are a number of people out there who are driving without any insurance. In addition, Maryland law requires only that a person have what is called a 30/60 policy, meaning that the minimum amount of coverage is $30,000 per person and $60,000 aggregate for a claim (for situations where multiple people are injured).
Uninsured Auto Accidents
So what happens if you’re involved in an accident and the driver of the other vehicle either does not have car insurance or has insufficient insurance to cover your damages?
Fortunately, Maryland law also requires that any policy issued in the state has what is referred to as Uninsured or Underinsured Motorist Coverage (more frequently referred to as UM/UIM coverage). The only exception is if the insured waives that coverage in writing. However, it should be noted that a waiver only reduces UM coverage to the statutory minimum and does not eliminate the coverage entirely.
So, in those situations where the driver who caused your injuries has either no or insufficient insurance coverage, your UM/UIM policy provision will “kick in” and ensure that you are protected.
Uninsured Motorist Coverage
For practical purposes, the application of the Uninsured or UM provision of your policy is relatively uncomplicated. If you are injured in either a “hit and run” accident or where the at-fault driver had no insurance, you would pursue your personal injury claim under the UM provision of your own policy.
Obviously, that claim would be subject to the limits of your coverage, so even if you had a $1,000,000 case, if you only have $100,000 in UM coverage, that would be the extent of what you could collect.
You would still be required to establish the fault of the uninsured driver and provide evidence of your injuries and pain and suffering, in the same way that you would if you were pursuing the claim directly against the at-fault driver.
Underinsured Motorist Coverage
Underinsured motorist or UIM claims tend to be more complicated and complex. Specifically, you are dealing with a situation where the at-fault driver does have insurance, but you are making the claim that your damages exceed the at-fault driver’s liability policy limits.
In those situations, before you are able to obtain any additional benefits under your own policy, you are first obligated to exhaust the full amount of coverage from the at-fault driver. This requires that the insurance company for the tortfeasor “tender” their policy limits. Once that occurs, you are then required to send a formal letter to your insurance company advising that the at fault driver’s insurance company tendered their policy limits.
The reason for this is that the tortfeasor’s insurer requires, as part of its policy limits tender, that the tortfeasor is released from any future claims as a result of the accident. That makes sense – they don’t want to pay out the full amount of the policy unless they know that their insured is completely protected.
However, the UIM insurer maintains a right of subrogation against the at-fault driver. This is a legal way of saying that if your insurance company has to pay you money because of someone else’s negligence, your insurance company could go after that person to get their money back.
So the at-fault driver’s insurance will not actually pay the policy limits unless the UIM insurer waives its right to subrogation. If the UIM carrier refuses to waive subrogation, then the tender is withdrawn and there is no settlement. However, the UIM carrier must tender the liability policy limits to the injured insured within thirty (30) days of its refusal to consent, which is required to be provided in writing.
However, if the UIM carrier agrees to waive subrogation, then the tortfeasor is protected. That insurer will pay the policy limits, and you are able to negotiate with your own insurance company for any additional settlement funds over and above the funds you already received.
Can I Add My UIM Policy Limits to the Liability Policy Limits?
A common question is whether you can add the two policies together to maximize the amount of insurance coverage available. This is more frequently referred to as “stacking” and it is not permitted in Maryland, except in certain situations which are addressed below.
To illustrate this point, let’s use an example. Assume hypothetically, that you are involved in an accident where the tortfeasor had $30,000 in insurance coverage and you had a $100,000 UM/UIM policy. Under Maryland law, you could not add – or stack – those policies together to obtain $130,000 in insurance coverage. You are limited to the total amount of coverage available under your own policy.
So in this hypothetical, the most you could receive was $100,000 (the total amount of your coverage). $30,000 from the tortfeasor’s insurance policy, and the additional $70,000 from your own policy.
However, effective October 1, 2017, Maryland adopted a new law that now permits individuals to purchase certain enhanced insurance policies that allow stacking. However, these are very specific types of policies, so if you have any questions, you should contact your insurance company or broker and they should be able to advise and assist you.
Multiple Layers of UM/UIM Coverage
It is possible in certain situations, that there could be multiple UM/UIM policies available to an individual. Normally, for drivers and passengers, the coverage for the vehicle in which they were traveling is primary, but there may well be a secondary policy as well.
Another example for purposes of illustration. Suppose you are a passenger in your friend’s vehicle and you get into an accident with another car. Let’s assume that the tortfeasor has $30,000 in coverage available to you and that your friend (whose car you were traveling in), has $100,000 in UIM coverage. However, let’s further assume that you have your own insurance policy which has $500,000 in UIM coverage.
In that scenario, depending on the extent of your injuries and pain and suffering, once the $30,000 in tortfeasor coverage is exhausted, your friend’s UIM policy would be primary up to $100,00 (so an additional $70,000). But then, because you had a separate policy in excess of the $100,000, your policy would then kick in as secondary UIM coverage for up to an additional $400,000.
What Does This Mean for Me?
As you can see from all of the above, UM/UIM situations can be very complicated and difficult to navigate.
Making sure that you have the benefit of all available insurance coverages is a key part of ensuring you receive fair compensation for your injuries. And it stands to reason that if you want to ensure you are receiving the best legal advice, you need a lawyer with experience in handling similar claims successfully. We at Dubo Law are experienced at doing just that. We are well versed in Maryland insurance law and will fight aggressively to protect your rights.
If you or a loved one has been the victim of a car accident in Baltimore City, Baltimore County, or anywhere else in Maryland, and you are not sure of your rights, call us at 443-275-6345. We can schedule a free consultation to begin the process of investigating your personal injury case. There is no risk to you and we do not receive any compensation unless and until we obtain a recovery. Call us now and let us fight for you!
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Lutherville-Timonium, MD 21093
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