EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0266*
HOUSE BILL 266
C4 2lr1494
CF SB 301
By: Delegate Crosby
Introduced and read first time: January 13, 2022
Assigned to: Economic Matters
Committee Report: Favorable
House action: Adopted
Read second time: March 3, 2022
CHAPTER ______
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
2 HOUSE BILL 266
19–509. 1
(a) In this section, “uninsured motor vehicle” means a motor vehicle: 2
(1) the ownership, maintenance, or use of which has resulted in the bodily 3
injury or death of an insured; and 4
(2) for which the sum of the limits of liability under all valid and collectible 5
liability insurance policies, bonds, and securities applicable to bodily injury or death: 6
(i) is less than the amount of coverage provided under this section; 7
or 8
(ii) has been reduced by payment to other persons of claims arising 9
from the same occurrence to an amount less than the amount of coverage provided under 10
this section. 11
(b) The uninsured motorist coverage required by this section does not apply to a 12
motor vehicle liability insurance policy: 13
(1) that insures a motor vehicle that: 14
(i) is not subject to registration under § 13 –402 of the 15
Transportation Article because it is not driven on a highway; or 16
(ii) is exempt from registration under § 13–402(c)(10) of the 17
Transportation Article; or 18
(2) if the first named insured under a policy or binder of private passenger 19
motor vehicle liability insurance has [elected to obtain] NOT WAIVED AND THERE FORE 20
MAINTAINS enhanced underinsured motorist coverage under § 19–509.1 of this subtitle 21
[instead of the uninsured motorist coverage required under this section]. 22
(c) In addition to any other coverage required by this subtitle, each motor vehicle 23
liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall 24
contain coverage for damages, subject to the policy limits, that: 25
(1) the insured is entitled to recover from the owner or operator of an 26
uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 27
arising out of the ownership, maintenance, or use of the uninsured motor vehicle; 28
(2) the insured is entitled to recover from the owner or operator of an 29
uninsured motor vehicle because of property damage, including loss of use of the insured 30
vehicle; and 31
(3) a surviving relative of the insured, who is described in § 3–904 of the 32
Courts Article, is entitled to recover from the owner or operator of an uninsured motor 33 HOUSE BILL 266 3
vehicle because the insured died as the result of a motor vehicle accident arising out of the 1
ownership, maintenance, or use of the uninsured motor vehicle. 2
19–509.1. 3
(a) In this section, “underinsured motor vehicle” means a motor vehicle that has 4
liability coverage in an amount less than, more than, or equal to the uninsured motorist 5
coverage provided under the insured party’s motor vehicle liability insurance policy. 6
(b) The enhanced underinsured motorist coverage required by this section does 7
not apply to a motor vehicle liability insurance policy: 8
(1) that insures a motor vehicle that: 9
(i) is not subject to registration under § 13 –402 of the 10
Transportation Article because it is not driven on a highway; or 11
(ii) is exempt from registration under § 13–402(c)(10) of the 12
Transportation Article; or 13
(2) [when] IF a first named insured under a policy or binder of private 14
passenger motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 15
underinsured motorist coverage under this section [instead of the uninsured motorist 16
coverage required under § 19–509 of this subtitle]. 17
(c) (1) [An] UNLESS WAIVED IN ACCO RDANCE WITH THIS SUB SECTION, 18
AN insurer shall [offer] PROVIDE enhanced underinsured motorist coverage [at the time 19
of purchase of a private passenger motor vehicle liability insurance policy]. 20
(2) (I) The first named insured under a policy or binder of private 21
passenger motor vehicle liability insurance may elect to [obtain] WAIVE enhanced 22
underinsured motorist coverage AND instead [of the] MAINTAIN uninsured motorist 23
coverage required under § 19–509 of this subtitle. 24
(II) IF THE FIRST NAMED IN SURED DOES NOT WISH TO OBTAIN 25
THE ENHANCED UNDERIN SURED MOTORIST COVER AGE UNDER THIS SECTI ON, THE 26
FIRST NAMED INSURED SHALL MAKE AN AFFIRM ATIVE WRITTEN STATEME NT 27
WAIVING THE COVERAGE . 28
(III) A WAIVER MADE UNDER TH IS SUBSECTION IS NOT 29
EFFECTIVE UNLESS , BEFORE THE WAIVER , THE INSURER GIVES TH E FIRST NAMED 30
INSURED WRITTEN NOTI CE OF THE NATURE , EXTENT, BENEFIT, AND COST OF THE 31
LEVEL OF THE UND ERINSURED MOTORIST C OVERAGE BEING WAIVED . 32
4 HOUSE BILL 266
(IV) 1. A WAIVER MADE UNDER TH IS SUBSECTION SHALL BE 1
MADE ON THE FORM THA T THE COMMISSIONER REQUIRES . 2
2. THE FORM MAY BE PART OF THE INSURANCE 3
CONTRACT. 4
3. THE FORM SHALL CLEARL Y AND CONCISELY EXPL AIN 5
IN AT LEAST 10 POINT BOLDFACE TYPE : 6
A. THE NATURE , EXTENT, BENEFIT, AND COST OF THE 7
LEVEL OF THE UNDERIN SURED MOTORIST COVER AGE THAT WOULD BE PR OVIDED 8
UNDER THE POLICY IF NOT WAIVED BY THE FI RST NAMED INSURED ; 9
B. THAT A FAILURE OF TH E FIRST NAME D INSURED TO 10
MAKE A WAIVER REQUIR ES THE INSURER TO PR OVIDE UNDERINSURED M OTORIST 11
COVERAGE; 12
C. THAT THE INSURER MAY NOT REFUSE TO 13
UNDERWRITE A PERSON BECAUSE THE PERSON R EFUSES TO WAIVE THE 14
UNDERINSURED MOTORIS T COVERAGE UNDER THI S SUBSECTION; AND 15
D. THAT A WAIVER MADE U NDER THIS SUBSECTION MUST 16
BE AN AFFIRMATIVE WR ITTEN WAIVER. 17
(V) IF THE FIRST NAMED IN SURED DOES NOT MAKE AN 18
AFFIRMATIVE WRITTEN STATEMENT WAIVING TH E ENHANCED UNDERINSU RED 19
MOTORIST COVERAGE , THE INSURER SHALL PR OVIDE THE COVERAG E UNDER THIS 20
SECTION. 21
(3) Unless the first named insured affirmatively makes a change in 22
writing, the election to [obtain] WAIVE enhanced underinsured motorist coverage applies 23
to all subsequent renewals of coverage and to all other policies or endorsements that extend, 24
change, supersede, or replace an existing private passenger motor vehicle insurance policy 25
issued to the first named insured. 26
(d) In addition to any other coverage required by this subtitle, each private 27
passenger motor vehicle liability insurance policy issued, sold, or delivered in the State on 28
or after July 1, [2018] 2023, to an insured that [elects to obtain] MAINTAINS enhanced 29
underinsured motorist coverage instead of the uninsured motorist coverage required under 30
§ 19–509 of this subtitle, shall contain coverage for damages, subject to the policy limits, 31
that: 32
HOUSE BILL 266 5
(1) the insured is entitled to recover from the owner or operator of an 1
underinsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 2
arising out of the ownership, maintenance, or use of the underinsured motor vehicle; 3
(2) the insured is entitled to recover from the owner or operator of an 4
underinsured motor vehicle because of property damage, including loss of use of the insured 5
vehicle; and 6
(3) a surviving relative of the insured, who is described in § 3–904 of the 7
Courts Article, is entitled to recover from the owner or operator of an underinsured motor 8
vehicle because the insured died as the result of a motor vehicle accident arising out of the 9
ownership, maintenance, or use of the underinsured motor vehicle. 10
(e) The [offer of] enhanced underinsured motorist coverage required by this 11
section shall be on the form that the Commissioner requires. 12
(f) (1) The enhanced underinsured motorist coverage contained in a private 13
passenger motor vehicle liability insurance policy: 14
(i) shall at least equal: 15
1. the amounts required by Title 17 of the Transportation 16
Article for bodily injury and property damage, including loss of use of the insured vehicle; 17
and 18
2. the coverage provided to a qualified person under Title 20, 19
Subtitle 6 of this article; and 20
(ii) may not exceed the amount of liability coverage provided under 21
the policy. 22
(2) The amount of enhanced underinsured motorist coverage provided 23
under a private passenger motor vehicle liability insurance policy shall equal the amount 24
of liability coverage provided under the policy. 25
(g) An insurer may exclude from the enhanced underinsured motorist coverage 26
required by this section benefits for: 27
(1) the named insured or a family member of the named insured who 28
resides in the named insured’s household for an injury that occurs when the named insured 29
or family member is occupying or is struck as a pedestrian by an underinsured motor 30
vehicle that is owned by the named insured or an immediate family member of the named 31
insured who resides in the named insured’s household; and 32
(2) the named insured, a family member of the named insured who resides 33
in the named insured’s household, and any other individual who has other applicable motor 34
vehicle insurance for an injury that occurs when the named insured, family member, or 35 6 HOUSE BILL 266
other individual is occupying or is struck as a pedestrian by the insured motor vehicle while 1
the motor vehicle is operated or used by an individual who is excluded from coverage under 2
§ 27–609 of this article. 3
(h) The limit of liability for an insurer that provides enhanced underinsured 4
motorist coverage under this section: 5
(1) is subject to § 19–511.1 of this subtitle; and 6
(2) is the amount of that coverage without any reduction for the amount 7
paid to the insured, that exhausts any applicable liability insurance policies, bonds, and 8
securities, on behalf of any person that may be held liable for the bodily injuries or death 9
of the insured. 10
(i) (1) A policy that, as its primary purpose, provides coverage in excess of 11
other valid and collectible insurance or qualified self–insurance may include the enhanced 12
underinsured motorist coverage provided for in this section. 13
(2) The enhanced underinsured motorist coverage required by this section 14
is primary to any right to recovery from the Maryland Automobile Insurance Fund under 15
Title 20, Subtitle 6 of this article. 16
(j) An endorsement or a provision that protects the insured against damages 17
caused by an underinsured motor vehicle that is contained in a policy issued and delivered 18
in the State is deemed to cover damages caused by a motor vehicle insured by a liability 19
insurer that is insolvent or otherwise unable to pay claims to the same extent and in the 20
same manner as if the damages were caused by an underinsured motor vehicle. 21
(k) A provision in a private passenger motor vehicle liability insurance policy 22
issued on or after July 1, 2018, about coverage for damages sustained by the insured as a 23
result of the operation of an underinsured motor vehicle that requires a dispute between 24
the insured and the insurer to be submitted to binding arbitration is prohibited and is of 25
no legal effect. 26
19–510. 27
(a) This section applies only when: 28
(1) the liability coverage under a policy or binder of private passenger 29
motor vehicle liability insurance exceeds the amount required under § 17–103 of the 30
Transportation Article; and 31
(2) the first named insured under a policy or binder of private passenger 32
motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 33
underinsured motorist coverage under § 19–509.1 of this subtitle AND instead [of the] 34
MAINTAINS uninsured motorist coverage required under § 19–509 of this subtitle. 35
HOUSE BILL 266 7
(b) (1) If the first named insured under a policy or binder of private passenger 1
motor vehicle liability insurance does not wish to obtain uninsured motorist coverage in the 2
same amount as the liability coverage provided under the policy or binder, the first named 3
insured shall make an affirmative written waiver of having uninsured motorist coverage in 4
the same amount as the liability coverage. 5
(2) If the first named insured does not make an affirmative written waiver 6
under this section, the insurer shall provide uninsured motorist coverage in an amount 7
equal to the amount of the liability coverage provided under the policy or binder. 8
19–511. 9
(a) This section [does not apply] APPLIES ONLY when the first named insured 10
under a policy or binder of private passenger motor vehicle liability insurance has [elected 11
to obtain] WAIVED enhanced underinsured motorist coverage under § 19–509.1 of this 12
subtitle AND instead [of the] MAINTAINS uninsured motorist coverage required under § 13
19–509 of this subtitle. 14
(b) If an injured person receives a written offer from a motor vehicle insurance 15
liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or 16
death, and the amount of the settlement offer, in combination with any other settlements 17
arising out of the same occurrence, would exhaust the bodily injury or death limits of the 18
applicable liability insurance policies, bonds, and securities, the injured person shall send 19
by certified mail, to any insurer that provides uninsured motorist coverage for the bodily 20
injury or death, a copy of the liability insurer’s written settlement offer. 21
19–511.1. 22
(a) This section applies only when the first named insured under a policy or 23
binder of private passenger motor vehicle liability insurance has [elected to obtain] NOT 24
WAIVED AND THEREFORE MAINTAINS enhanced underinsured motorist coverage under 25
§ 19–509.1 of this subtitle [instead of the uninsured motorist coverage required under § 26
19–509 of this subtitle]. 27
(b) If an injured person receives a written offer from a motor vehicle liability 28
insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and 29
the amount of the settlement offer, in combination with any other settlements arising out 30
of the same occurrence, would exhaust the bodily injury or death limits of the applicable 31
liability insurance policies, bonds, and securities, the injured person shall send by certified 32
mail, to any insurer that provides enhanced underinsured motorist coverage for the bodily 33
injury or death, a copy of the liability insurer’s written settlement offer. 34
SECTION 2. AND BE IT FURTHER ENACTED, That this Act applies to each policy 35
of private passenger motor vehicle insurance issued, sold, or delivered in the State on or 36
after July 1, 2023. 37
8 HOUSE BILL 266
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
October 1, 2022. 2
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.