EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0266*
HOUSE BILL 266
C4 2lr1494
CF 2lr0724
By: Delegate Crosby
Introduced and read first time: January 13, 2022
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Private Passenger Motor Vehicle Liability Insurance – Enhanced Underinsured 2
Motorist Coverage – Opt–Out Option 3
FOR the purpose of converting enhanced underinsured motorist coverage from an opt–in 4
offering of coverage into an opt–out coverage option under certain provisions of law 5
establishing requirements for private passenger motor vehicle liability insurance; 6
and generally relating to private passenger motor vehicle liability insurance. 7
BY repealing and reenacting, without amendments, 8
Article – Insurance 9
Section 19–509(a) and (c), 19–510(b), 19–511(b), and 19–511.1(b) 10
Annotated Code of Maryland 11
(2017 Replacement Volume and 2021 Supplement) 12
BY repealing and reenacting, with amendments, 13
Article – Insurance 14
Section 19–509(b), 19–509.1, 19–510(a), 19–511(a), and 19–511.1(a) 15
Annotated Code of Maryland 16
(2017 Replacement Volume and 2021 Supplement) 17
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
That the Laws of Maryland read as follows: 19
Article – Insurance 20
19–509. 21
(a) In this section, “uninsured motor vehicle” means a motor vehicle: 22
(1) the ownership, maintenance, or use of which has resulted in the bodily 23
injury or death of an insured; and 24 2 HOUSE BILL 266
(2) for which the sum of the limits of liability under all valid and collectible 1
liability insurance policies, bonds, and securities applicable to bodily injury or death: 2
(i) is less than the amount of coverage provided under this section; 3
or 4
(ii) has been reduced by payment to other persons of claims arising 5
from the same occurrence to an amount less than the amount of coverage provided under 6
this section. 7
(b) The uninsured motorist coverage required by this section does not apply to a 8
motor vehicle liability insurance policy: 9
(1) that insures a motor vehicle that: 10
(i) is not subject to registration under § 13 –402 of the 11
Transportation Article because it is not driven on a highway; or 12
(ii) is exempt from registration under § 13–402(c)(10) of the 13
Transportation Article; or 14
(2) if the first named insured under a policy or binder of private passenger 15
motor vehicle liability insurance has [elected to obtain] NOT WAIVED AND THERE FORE 16
MAINTAINS enhanced underinsured motorist coverage under § 19–509.1 of this subtitle 17
[instead of the uninsured motorist coverage required under this section]. 18
(c) In addition to any other coverage required by this subtitle, each motor vehicle 19
liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall 20
contain coverage for damages, subject to the policy limits, that: 21
(1) the insured is entitled to recover from the owner or operator of an 22
uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 23
arising out of the ownership, maintenance, or use of the uninsured motor vehicle; 24
(2) the insured is entitled to recover from the owner or operator of an 25
uninsured motor vehicle because of property damage, including loss of use of the insured 26
vehicle; and 27
(3) a surviving relative of the insured, who is described in § 3–904 of the 28
Courts Article, is entitled to recover from the owner or operator of an uninsured motor 29
vehicle because the insured died as the result of a motor vehicle accident arising out of the 30
ownership, maintenance, or use of the uninsured motor vehicle. 31
19–509.1. 32
HOUSE BILL 266 3
(a) In this section, “underinsured motor vehicle” means a motor vehicle that has 1
liability coverage in an amount less than, more than, or equal to the uninsured motorist 2
coverage provided under the insured party’s motor vehicle liability insurance policy. 3
(b) The enhanced underinsured motorist coverage required by this section does 4
not apply to a motor vehicle liability insurance policy: 5
(1) that insures a motor vehicle that: 6
(i) is not subject to registration under § 13–402 of the 7
Transportation Article because it is not driven on a highway; or 8
(ii) is exempt from registration under § 13–402(c)(10) of the 9
Transportation Article; or 10
(2) [when] IF a first named insured under a policy or binder of private 11
passenger motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 12
underinsured motorist coverage under this section [instead of the uninsured motorist 13
coverage required under § 19–509 of this subtitle]. 14
(c) (1) [An] UNLESS WAIVED IN ACCO RDANCE WITH THIS SUB SECTION, 15
AN insurer shall [offer] PROVIDE enhanced underinsured motorist coverage [at the time 16
of purchase of a private passenger motor vehicle liability insurance policy]. 17
(2) (I) The first named insured under a policy or binder of private 18
passenger motor vehicle liability insurance may elect to [obtain] WAIVE enhanced 19
underinsured motorist coverage AND instead [of the] MAINTAIN uninsured motorist 20
coverage required under § 19–509 of this subtitle. 21
(II) IF THE FIRST NAMED INSURE D DOES NOT WISH TO O BTAIN 22
THE ENHANCED UNDERIN SURED MOTORIST COVER AGE UNDER THIS SECTI ON, THE 23
FIRST NAMED INSURED SHALL MAKE AN AFFIRM ATIVE WRITTEN STATEM ENT 24
WAIVING THE COVERAGE . 25
(III) A WAIVER MADE UNDER TH IS SUBSECTION IS NOT 26
EFFECTIVE UNLESS , BEFORE THE WAIVER , THE INSURER GIVES TH E FIRST NAMED 27
INSURED WRITTEN NOTI CE OF THE NATURE , EXTENT, BENEFIT, AND COST OF THE 28
LEVEL OF THE UNDERIN SURED MOTORIST COVER AGE BEING WAIVED . 29
(IV) 1. A WAIVER MADE UNDER TH IS SUBSECTION SHALL BE 30
MADE ON THE FORM THAT THE COMMISSIONER REQUIRES . 31
2. THE FORM MAY BE PART OF THE INSURANCE 32
CONTRACT. 33
4 HOUSE BILL 266
3. THE FORM SHALL CLEARL Y AND CONCISELY EXPL AIN 1
IN AT LEAST 10 POINT BOLDFACE TYPE : 2
A. THE NATURE , EXTENT, BENEFIT, AND COST OF THE 3
LEVEL OF TH E UNDERINSURED MOTOR IST COVERAGE THAT WO ULD BE PROVIDED 4
UNDER THE POLICY IF NOT WAIVED BY THE FI RST NAMED INSURED ; 5
B. THAT A FAILURE OF TH E FIRST NAMED INSURE D TO 6
MAKE A WAIVER REQUIR ES THE INSURER TO PR OVIDE UNDERINSURED M OTORIST 7
COVERAGE; 8
C. THAT THE INSURER MAY N OT REFUSE TO 9
UNDERWRITE A PERSON BECAUSE THE PERSON R EFUSES TO WAIVE THE 10
UNDERINSURED MOTORIS T COVERAGE UNDER THI S SUBSECTION; AND 11
D. THAT A WAIVER MADE U NDER THIS SUBSECTION MUST 12
BE AN AFFIRMATIVE WR ITTEN WAIVER. 13
(V) IF THE FIRST NAMED INSURED DOES NOT MAKE AN 14
AFFIRMATIVE WRITTEN STATEMENT WAIVING TH E ENHANCED UNDERINSU RED 15
MOTORIST COVERAGE , THE INSURER SHALL PR OVIDE THE COVERAGE U NDER THIS 16
SECTION. 17
(3) Unless the first named insured affirmatively makes a change in 18
writing, the election to [obtain] WAIVE enhanced underinsured motorist coverage applies 19
to all subsequent renewals of coverage and to all other policies or endorsements that extend, 20
change, supersede, or replace an existing private passenger motor vehicle insurance policy 21
issued to the first named insured. 22
(d) In addition to any other coverage required by this subtitle, each private 23
passenger motor vehicle liability insurance policy issued, sold, or delivered in the State on 24
or after July 1, [2018] 2023, to an insured that [elects to obtain] MAINTAINS enhanced 25
underinsured motorist coverage instead of the uninsured motorist coverage required under 26
§ 19–509 of this subtitle, shall contain coverage for damages, subject to the policy limits, 27
that: 28
(1) the insured is entitled to recover from the owner or operator of an 29
underinsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 30
arising out of the ownership, maintenance, or use of the underinsured motor vehicle; 31
(2) the insured is entitled to recover from the owner or operator of an 32
underinsured motor vehicle because of property damage, including loss of use of the insured 33
vehicle; and 34
HOUSE BILL 266 5
(3) a surviving relative of the insured, who is described in § 3–904 of the 1
Courts Article, is entitled to recover from the owner or operator of an underinsured motor 2
vehicle because the insured died as the result of a motor vehicle accident arising out of the 3
ownership, maintenance, or use of the underinsured motor vehicle. 4
(e) The [offer of] enhanced underinsured motorist coverage required by this 5
section shall be on the form that the Commissioner requires. 6
(f) (1) The enhanced underinsured motorist coverage contained in a private 7
passenger motor vehicle liability insurance policy: 8
(i) shall at least equal: 9
1. the amounts required by Title 17 of the Transportation 10
Article for bodily injury and property damage, including loss of use of the insured vehicle; 11
and 12
2. the coverage provided to a qualified person under Title 20, 13
Subtitle 6 of this article; and 14
(ii) may not exceed the amount of liability coverage provided under 15
the policy. 16
(2) The amount of enhanced underinsured motorist coverage provided 17
under a private passenger motor vehicle liability insurance policy shall equal the amount 18
of liability coverage provided under the policy. 19
(g) An insurer may exclude from the enhanced underinsured motorist coverage 20
required by this section benefits for: 21
(1) the named insured or a family member of the named insured who 22
resides in the named insured’s household for an injury that occurs when the named insured 23
or family member is occupying or is struck as a pedestrian by an underinsured motor 24
vehicle that is owned by the named insured or an immediate family member of the named 25
insured who resides in the named insured’s household; and 26
(2) the named insured, a family member of the named insured who resides 27
in the named insured’s household, and any other individual who has other applicable motor 28
vehicle insurance for an injury that occurs when the named insured, family member, or 29
other individual is occupying or is struck as a pedestrian by the insured motor vehicle while 30
the motor vehicle is operated or used by an individual who is excluded from coverage under 31
§ 27–609 of this article. 32
(h) The limit of liability for an insurer that provides enhanced underinsured 33
motorist coverage under this section: 34
(1) is subject to § 19–511.1 of this subtitle; and 35 6 HOUSE BILL 266
(2) is the amount of that coverage without any reduction for the amount 1
paid to the insured, that exhausts any applicable liability insurance policies, bonds, and 2
securities, on behalf of any person that may be held liable for the bodily injuries or death 3
of the insured. 4
(i) (1) A policy that, as its primary purpose, provides coverage in excess of 5
other valid and collectible insurance or qualified self–insurance may include the enhanced 6
underinsured motorist coverage provided for in this section. 7
(2) The enhanced underinsured motorist coverage required by this section 8
is primary to any right to recovery from the Maryland Automobile Insurance Fund under 9
Title 20, Subtitle 6 of this article. 10
(j) An endorsement or a provision that protects the insured against damages 11
caused by an underinsured motor vehicle that is contained in a policy issued and delivered 12
in the State is deemed to cover damages caused by a motor vehicle insured by a liability 13
insurer that is insolvent or otherwise unable to pay claims to the same extent and in the 14
same manner as if the damages were caused by an underinsured motor vehicle. 15
(k) A provision in a private passenger motor vehicle liability insurance policy 16
issued on or after July 1, 2018, about coverage for damages sustained by the insured as a 17
result of the operation of an underinsured motor vehicle that requires a dispute between 18
the insured and the insurer to be submitted to binding arbitration is prohibited and is of 19
no legal effect. 20
19–510. 21
(a) This section applies only when: 22
(1) the liability coverage under a policy or binder of private passenger 23
motor vehicle liability insurance exceeds the amount required under § 17–103 of the 24
Transportation Article; and 25
(2) the first named insured under a policy or binder of private passenger 26
motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 27
underinsured motorist coverage under § 19–509.1 of this subtitle AND instead [of the] 28
MAINTAINS uninsured motorist coverage required under § 19–509 of this subtitle. 29
(b) (1) If the first named insured under a policy or binder of private passenger 30
motor vehicle liability insurance does not wish to obtain uninsured motorist coverage in the 31
same amount as the liability coverage provided under the policy or binder, the first named 32
insured shall make an affirmative written waiver of having uninsured motorist coverage in 33
the same amount as the liability coverage. 34
HOUSE BILL 266 7
(2) If the first named insured does not make an affirmative written waiver 1
under this section, the insurer shall provide uninsured motorist coverage in an amount 2
equal to the amount of the liability coverage provided under the policy or binder. 3
19–511. 4
(a) This section [does not apply] APPLIES ONLY when the first named insured 5
under a policy or binder of private passenger motor vehicle liability insurance has [elected 6
to obtain] WAIVED enhanced underinsured motorist coverage under § 19–509.1 of this 7
subtitle AND instead [of the] MAINTAINS uninsured motorist coverage required under § 8
19–509 of this subtitle. 9
(b) If an injured person receives a written offer from a motor vehicle insurance 10
liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or 11
death, and the amount of the settlement offer, in combination with any other settlements 12
arising out of the same occurrence, would exhaust the bodily injury or death limits of the 13
applicable liability insurance policies, bonds, and securities, the injured person shall send 14
by certified mail, to any insurer that provides uninsured motorist coverage for the bodily 15
injury or death, a copy of the liability insurer’s written settlement offer. 16
19–511.1. 17
(a) This section applies only when the first named insured under a policy or 18
binder of private passenger motor vehicle liability insurance has [elected to obtain] NOT 19
WAIVED AND THEREFORE MAINTAINS enhanced underinsured motorist coverage under 20
§ 19–509.1 of this subtitle [instead of the uninsured motorist coverage required under § 21
19–509 of this subtitle]. 22
(b) If an injured person receives a written offer from a motor vehicle liability 23
insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and 24
the amount of the settlement offer, in combination with any other settlements arising out 25
of the same occurrence, would exhaust the bodily injury or death limits of the applicable 26
liability insurance policies, bonds, and securities, the injured person shall send by certified 27
mail, to any insurer that provides enhanced underinsured motorist coverage for the bodily 28
injury or death, a copy of the liability insurer’s written settlement offer. 29
SECTION 2. AND BE IT FURTHER ENACTED, That this Act applies to each policy 30
of private passenger motor vehicle insurance issued, sold, or delivered in the State on or 31
after July 1, 2023. 32
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effec t 33
October 1, 2022. 34