Maryland's New Uninsured Motorist Law
Maryland's New Uninsured Motorist Law - and How Dangerous It Is for Car Owners!
The State of Maryland has recently enacted a set of new laws, fundamentally changing how uninsured motorist claims work in that state. However, the new law is very confusing to most people who do not understand the entirety of insurance law. The reality is that the car insurance companies are jumping up and down with joy right now, as this confusion is going to see a huge amount of people sign up for cheaper car insurance (and through the new law, these companies won't have to pay out as much money after an accident!), and these people do not understand that saving a few dollars per month seriously prejudices there ability to get compensation after a Maryland car accident!
Read on to find out exactly how the law has changed, and how making the wrong choice and seriously hurt you.
What is Maryland Uninsured Motorist Coverage?
Uninsured motorist coverage (UM) also includes underinsured motorist coverage (called UIM), and it is automatically part of any car insurance policy that you sign up for. Your car insurance policy has two parts: 1) you have bodily injury limits, which is the amount an insurance company will pay to someone else for an accident that you have caused. The other half of your policy is 2) uninsured motorist coverage, which is meant to protect you in the event that the person who causes an accident either a) doesn't have car insurance at all, and is thus uninsured, or someone b) who has some car insurance, but does not have enough to compensate you fully for your injuries and other damages.
Uninsured motorist coverage most commonly comes into play in Hit and Run car accidents, where the other driver is not identifiable.
How Does the New Law Change All of This?
The new law does not change what uninsured motorist coverage is, but it drastically changes what uninsured motorist coverage does after a car accident. The new Maryland law gives you a choice between options, at varying levels of coverage. Of course, one option is cheaper (the worst coverage), one costs a bit more, and the third option may cost you an extra $40-$50 per month. Unfortunately, the cheaper option is the most damaging for you and your family, as we explain.
The new uninsured motorist law gives you three options. Each of these options is broken down very precisely in the code, but it may be very confusing. We're going to show you exactly what the code says, and then all also, in italics, explain exactly what that means for you in practical terms:
OPTION 1- UM. My UM limits will equal my liability limits. This is to certify that I am the first named insured and I have been offered UM coverage in amounts equal to my liability limits of $_____ / $______ (bodily injury) and $_______(property damage) or $_________combined single limit, at a total premium of $_____________ (annually / policy period*). In the event of a claim, my UM coverage limit will be reduced by the amount of any available coverage from the at-fault party’s insurer.
This means that if you have $30,000 of UM coverage, and the tortfeasor (person at-fault) also has $30,000, then your total recovery is limited to the $30,000 of the other person's coverage, no matter how badly you were injured, and no matter your total damages are.
OPTION 2- UM Waived to less than my liability limits. My UM limits will be less than my liability limits but not less than the required minimum of $30,000 per person / $60,000 per accident for bodily injury and $15,000 per accident for property damage (30/60/15) or $75,000 for bodily injury and property damage per accident. In the event of a claim, my UM coverage limit will be reduced by the amount of any available coverage from the at-fault party’s insurer.
I affirmatively waive UM limits in an amount equal to my liability limits and instead elect to purchase lower UM limits of $_____ / $______ (bodily injury) and $_______(property damage) or $_________combined single limit, at a total premium of $_____________ (annually / policy period*), subject to the minimum limits required by Maryland law.
This option creates an "off-set" for the at-fault car insurance company's policy limits. Let's say you have $100,000 in UM coverage, and the person who caused your accident has $30,000 of coverage. Your total recovery will be limited to $100,000, because your underinsured motorist coverage gets to do this math: $100,000 - $30,000 = $70,000.
Said another way, it means the most money you can recover from the at-fault car insurance carrier after a Maryland car accident is going to be either 1) the at-fault car insurance policy limits or 2) your underinsured motorist coverage limits, whichever is greater.
OPTION 3 – Enhanced Underinsured Motorists (“EUIM”) Coverage. My EUIM limit will equal my liability limits. In the event of a claim, my EUIM coverage limit will not be reduced by the amount of any available coverage from the at-fault party’s insurer. This is to certify that I am the first named insured and I have been offered EUIM coverage in amounts equal to my liability limits of $_____ / $______ (bodily injury) and $_______(property damage) or $_________combined single limit, at a total premium of $_____________ (annually / policy period*).
This is the best coverage, which means that there is no offset or credit of anykind. So, using out scenario above, if you are in a Maryland car accident at the at-fault driver has $30,000 of coverage, and you have $100,000 of underinsured motorist coverage, you have a potential pool of $130,000 of car insurance to recover from!
This is the best option for you, and for your family. Blaszkow Legal strongly recommends that you purchase Enhanced Underinsured Motorist Coverage, if you can.
Note - the text above is taken directly from the Maryland Insurance Administration's Circular. We have seen it reproduced, exactly, in new Maryland car insurance policies.
Why is the New Maryland Uninsured Motorist Law so Dangerous for Families?
If you are out driving with your family, or perhaps taking the kids to school, and are involved in a car accident, then all the numbers and coverages we talked about, above, become very important. The decision made by a family member can truly impact the rest of the household.
Car insurance policies have limits, and those limits are often said with new numbers: for example, 30/60. This means that the policy has $30,000 of coverage available per person (the most an insurance company will may to a single claimant) and $60,000 per incident (the most, in aggregate, the insurance company will pay. This means $10,000 to each of 6 claimants or $30,000 to each of two. But no more, ever).
Now, consider everything together in this hypothetical: You are driving your two kids to school, and someone on their phone hits you from behind at a red light. You and the kids go to the hospital, and have a few months of physical therapy. There are xrays, CT scans, and more. You as a parent and each child have claims that, independently, would be worth $30,000 to $40,000 dollars, based on medical treatment, pain and suffering, and for you the parent, even more with lost wages!
In this scenario, the other driver has a Maryland minimum policy, meaning $30,000/$60,000 (30/60). You have selected Option 1, so you have no underinsured motorist coverage to look to from your own car insurance carrier. The only source of recovery for this crash is the at-fault driver's $60,000. But remember, your case is worth $30,000. And so are each of your kids', so there's another $60,000. That's a car accident case worth, potentially, $90,000 - with only $60,000 to compensate you, and your family members!
Be Careful When Renewing Car Insurance or Getting New Coverage
The new UM/UIM law is so dangerous to motorists, because they really do not understand what they are signing up for. Most people get very confused with all of the legal jargon in the insurance policies, and don't really comprehend what practical impact that has. We understand that many people are looking to save money on their car insurance. The sad reality is that life today is very expensive! But you don't want to be Pennywise and pound foolish.
The cheaper options that the insurance companies are offering May save you $15 or $20 a month. When you think about it, there are 12 months a year, so if you're saving $20 a month, that's $240 per year. After 10 years, you will have saved $2,400. Given the example above, is that really saving???
Call a Maryland Car Accident Lawyer and Let Us Review Your Insurance Coverage
If you live in the DC Metropolitan Area, or in and around Baltimore, then you know how common car accidents are! You know that you can be driving along the highway, and do absolutely nothing wrong, and still be involved in a car accident. You want to make sure that you are covered and protected in the event of a crash.
Call Blaszkow Legal today and let us review your car insurance coverage, and let you know exactly what the coverage you signed up for means to you, in the event of a car accident.
We have been protecting Maryland drivers for over 40 years, and we work hard to get your the compensation you deserve. Call Blaszkow Legal today for a free consultation!
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5270 Shawnee Road #102, Alexandria, Va. 22312
703-879-5910
Richmond Office:
7824 Shrader Road, Richmond, Va. 23294
804-273-8929
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Maryland Uninsured Motorist Law: https://law.justia.com/codes/maryland/insurance/title-19/subtitle-5/section-19-509/
Samples of what many insurance companies are having you E-sign. This document comes from Gainco Insurance. BE CAREFUL WHEN SIGNING THESE DOCUMENTS!!!!
Page 1 from Gainsco
Page 2 from Gainesco