EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0128*
HOUSE BILL 128
C4 3lr0343
HB 266/22 – ECM CF 3lr1667
By: Delegate Crosby
Introduced and read first time: January 13, 2023
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 2022 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 2022 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 128
(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
(a) In this section, “underinsured motor vehicle” means a motor vehicle that has 33 HOUSE BILL 128 3
liability coverage in an amount less than, more than, or equal to the uninsured motorist 1
coverage provided under the insured party’s motor vehicle liability insurance policy. 2
(b) The enhanced underinsured motorist coverage required by this section does 3
not apply to a motor vehicle liability insurance policy: 4
(1) that insures a motor vehicle that: 5
(i) is not subject to registration under § 13–402 of the 6
Transportation Article because it is not driven on a highway; or 7
(ii) is exempt from registration under § 13–402(c)(10) of the 8
Transportation Article; or 9
(2) [when] IF a first named insured under a policy or binder of private 10
passenger motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 11
underinsured motorist coverage under this section [instead of the uninsured motorist 12
coverage required under § 19–509 of this subtitle]. 13
(c) (1) [An] UNLESS WAIVED IN ACCORDANCE WITH THIS SUBSECTION, 14
AN insurer shall [offer] PROVIDE enhanced underinsured motorist coverage [at the time 15
of purchase of a private passenger motor vehicle liability insurance policy]. 16
(2) (I) The first named insured under a policy or binder of private 17
passenger motor vehicle liability insurance may elect to [obtain] WAIVE enhanced 18
underinsured motorist coverage AND instead [of the] MAINTAIN uninsured motorist 19
coverage required under § 19–509 of this subtitle. 20
(II) IF THE FIRST NAMED IN SURED DOES NOT WISH T O OBTAIN 21
THE ENHANCED UNDERIN SURED MOTORIST COVER AGE UNDER THIS SECTI ON, THE 22
FIRST NAMED INSURED SHALL MAKE AN AFFIRM ATIVE WRITTEN STATEM ENT 23
WAIVING THE COVERAGE . 24
(III) A WAIVER MADE UNDER TH IS SUBSECTION IS NOT 25
EFFECTIVE UNLESS , BEFORE THE WAIVER , THE INSURER GIVES TH E FIRST NAMED 26
INSURED WRITTEN NOTI CE OF THE NATURE , EXTENT, BENEFIT, AND COST OF THE 27
LEVEL OF THE ENHANCED UNDERINSURED MOTORIS T COVERAGE BEING WAI VED. 28
(IV) 1. A WAIVER MADE UNDER TH IS SUBSECTION SHALL BE 29
MADE ON TH E FORM THAT THE COMMISSIONER REQUIRES . 30
2. THE FORM MAY BE PART OF THE INSURANCE 31
CONTRACT. 32
3. THE FORM SHALL CLEARL Y AND CONCISELY EXPL AIN 33 4 HOUSE BILL 128
IN AT LEAST 10 POINT BOLDFACE TYPE : 1
A. THE NATURE , EXTENT, BENEFIT, AND COST OF THE 2
LEVEL OF THE ENHANCED UNDERINSURED MOTORIS T COVERAGE THAT WOUL D BE 3
PROVIDED UNDER THE P OLICY IF NOT WAIVED BY THE FIRST NAMED I NSURED; 4
B. THAT A FAILURE OF TH E FIRST NAMED INSURE D TO 5
MAKE A WAIVER REQUIR ES THE INSURER TO PR OVIDE ENHANCED UNDERINSURED 6
MOTORIST COVE RAGE; 7
C. THAT THE INSURER MAY NOT REFUSE TO 8
UNDERWRITE A PERSON BECAUSE THE PERSON R EFUSES TO WAIVE THE ENHANCED 9
UNDERINSURED MOTORIS T COVERAGE UNDER THI S SUBSECTION; AND 10
D. THAT A WAIVER MADE U NDER THIS SUBSECTION MUST 11
BE AN AFFIRMATIVE WR ITTEN WAIVER. 12
(V) IF THE FIRST NAMED IN SURED DOES NOT MAKE AN 13
AFFIRMATIVE WRITTEN STATEMENT WAIVING TH E ENHANCED UNDERINSU RED 14
MOTORIST COVERAGE , THE INSURER SHALL PR OVIDE THE COVERAGE U NDER THIS 15
SECTION. 16
(3) Unless the first named insured affirmatively makes a change in 17
writing, the election to [obtain] WAIVE enhanced underinsured motorist coverage applies 18
to all subsequent renewals of coverage and to all other policies or endorsements that extend, 19
change, supersede, or replace an existing private passenger motor vehicle insurance policy 20
issued to the first named insured. 21
(d) In addition to any other coverage required by this subtitle, each private 22
passenger motor vehicle liability insurance policy issued, sold, or delivered in the State on 23
or after July 1, [2018] 2024, to an insured that [elects to obtain] MAINTAINS enhanced 24
underinsured motorist coverage instead of the uninsured motorist coverage required under 25
§ 19–509 of this subtitle shall contain coverage for damages, subject to the policy limits, 26
that: 27
(1) the insured is entitled to recover from the owner or operator of an 28
underinsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 29
arising out of the ownership, maintenance, or use of the underinsured motor vehicle; 30
(2) the insured is entitled to recover from the owner or operator of an 31
underinsured motor vehicle because of property damage, including loss of use of the insured 32
vehicle; and 33
(3) a surviving relative of the insured, who is described in § 3–904 of the 34
Courts Article, is entitled to recover from the owner or operator of an underinsured motor 35 HOUSE BILL 128 5
vehicle because the insured died as the result of a motor vehicle accident arising out of the 1
ownership, maintenance, or use of the underinsured motor vehicle. 2
(e) The [offer of] enhanced underinsured motorist coverage required by this 3
section shall be on the form that the Commissioner requires. 4
(f) (1) The enhanced underinsured motorist coverage contained in a private 5
passenger motor vehicle liability insurance policy: 6
(i) shall at least equal: 7
1. the amounts required by Title 17 of the Transportation 8
Article for bodily injury and property damage, including loss of use of the insured vehicle; 9
and 10
2. the coverage provided to a qualified person under Title 20, 11
Subtitle 6 of this article; and 12
(ii) may not exceed the amount of liability coverage provided under 13
the policy. 14
(2) The amount of enhanced underinsured motorist coverage provided 15
under a private passenger motor vehicle liability insurance policy shall equal the amount 16
of liability coverage provided under the policy. 17
(g) An insurer may exclude from the enhanced underinsured motorist coverage 18
required by this section benefits for: 19
(1) the named insured or a family member of the named insured who 20
resides in the named insured’s household for an injury that occurs when the named insured 21
or family member is occupying or is struck as a pedestrian by an underinsured motor 22
vehicle that is owned by the named insured or an immediate family member of the named 23
insured who resides in the named insured’s household; and 24
(2) the named insured, a family member of the named insured who resides 25
in the named insured’s household, and any other individual who has other applicable motor 26
vehicle insurance for an injury that occurs when the named insured, family member, or 27
other individual is occupying or is struck as a pedestrian by the insured motor vehicle while 28
the motor vehicle is operated or used by an individual who is excluded from coverage under 29
§ 27–609 of this article. 30
(h) The limit of liability for an insurer that provides enhanced underinsured 31
motorist coverage under this section: 32
(1) is subject to § 19–511.1 of this subtitle; and 33
(2) is the amount of that coverage without any reduction for the amount 34 6 HOUSE BILL 128
paid to the insured, that exhausts any applicable liability insurance policies, bonds, and 1
securities, on behalf of any person that may be held liable for the bodily injuries or death 2
of the insured. 3
(i) (1) A policy that, as its primary purpose, provides coverage in excess of 4
other valid and collectible insurance or qualified self–insurance may include the enhanced 5
underinsured motorist coverage provided for in this section. 6
(2) The enhanced underinsured motorist coverage required by this section 7
is primary to any right to recovery from the Maryland Automobile Insurance Fund under 8
Title 20, Subtitle 6 of this article. 9
(j) An endorsement or a provision that protects the insured against damages 10
caused by an underinsured motor vehicle that is contained in a policy issued and delivered 11
in the State is deemed to cover damages caused by a motor vehicle insured by a liability 12
insurer that is insolvent or otherwise unable to pay claims to the same extent and in the 13
same manner as if the damages were caused by an underinsured motor vehicle. 14
(k) A provision in a private passenger motor vehicle liability insurance policy 15
issued on or after July 1, 2018, about coverage for damages sustained by the insured as a 16
result of the operation of an underinsured motor vehicle that requires a dispute between 17
the insured and the insurer to be submitted to binding arbitration is prohibited and is of 18
no legal effect. 19
19–510. 20
(a) This section applies only when: 21
(1) the liability coverage under a policy or binder of private passenger 22
motor vehicle liability insurance exceeds the amount required under § 17–103 of the 23
Transportation Article; and 24
(2) the first named insured under a policy or binder of private passenger 25
motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 26
underinsured motorist coverage under § 19–509.1 of this subtitle AND instead [of the] 27
MAINTAINS uninsured motorist coverage required under § 19–509 of this subtitle. 28
(b) (1) If the first named insured under a policy or binder of private passenger 29
motor vehicle liability insurance does not wish to obtain uninsured motorist coverage in the 30
same amount as the liability coverage provided under the policy or binder, the first named 31
insured shall make an affirmative written waiver of having uninsured motorist coverage in 32
the same amount as the liability coverage. 33
(2) If the first named insured does not make an affirmative written waiver 34
under this section, the insurer shall provide uninsured motorist coverage in an amount 35
equal to the amount of the liability coverage provided under the policy or binder. 36
HOUSE BILL 128 7
19–511. 1
(a) This section [does not apply] APPLIES ONLY when the first named insured 2
under a policy or binder of private passenger motor vehicle liability insurance has [elected 3
to obtain] WAIVED enhanced underinsured motorist coverage under § 19–509.1 of this 4
subtitle AND instead [of the] MAINTAINS uninsured motorist coverage required under § 5
19–509 of this subtitle. 6
(b) If an injured person receives a written offer from a motor vehicle insurance 7
liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or 8
death, and the amount of the settlement offer, in combination with any other settlements 9
arising out of the same occurrence, would exhaust the bodily injury or death limits of the 10
applicable liability insurance policies, bonds, and securities, the injured person shall send 11
by certified mail, to any insurer that provides uninsured motorist coverage for the bodily 12
injury or death, a copy of the liability insurer’s written settlement offer. 13
19–511.1. 14
(a) This section applies only when the first named insured under a policy or 15
binder of private passenger motor vehicle liability insurance has [elected to obtain] NOT 16
WAIVED AND THEREFORE MAINTAIN S enhanced underinsured motorist coverage under 17
§ 19–509.1 of this subtitle [instead of the uninsured motorist coverage required under § 18
19–509 of this subtitle]. 19
(b) If an injured person receives a written offer from a motor vehicle liability 20
insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and 21
the amount of the settlement offer, in combination with any other settlements arising out 22
of the same occurrence, would exhaust the bodily injury or death limits of the applicable 23
liability insurance policies, bonds, and securities, the injured person shall send by certified 24
mail, to any insurer that provides enhanced underinsured motorist coverage for the bodily 25
injury or death, a copy of the liability insurer’s written settlement offer. 26
SECTION 2. AND BE IT FURTHER ENACTED, That this Act applies to each policy 27
of private passenger motor vehicle insurance issued, sold, or delivered in the State on or 28
after July 1, 2024. 29
SECTION 3. AND BE IT FURTHER E NACTED, That this Act shall take effect 30
October 1, 2023. 31