EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G 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.
Italics indicate opposite chamber/conference committee amendments.
*hb0128*
HOUSE BILL 128
C4 (3lr0343)
ENROLLED BILL
— Economic Matters/Finance —
Introduced by Delegate Crosby
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
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 2022 Supplement) 12
BY repealing and reenacting, with amendments, 13 2 HOUSE BILL 128
Article – Insurance 1
Section 19–509(b), 19–509.1, 19–510(a), 19–511(a), and 19–511.1(a) 2
Annotated Code of Maryland 3
(2017 Replacement Volume and 2022 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Insurance 7
19–509. 8
(a) In this section, “uninsured motor vehicle” means a motor vehicle: 9
(1) the ownership, maintenance, or use of which has resulted in the bodily 10
injury or death of an insured; and 11
(2) for which the sum of the limits of liability under all valid and collectible 12
liability insurance policies, bonds, and securities applicable to bodily injury or death: 13
(i) is less than the amount of coverage provided under this section; 14
or 15
(ii) has been reduced by payment to other persons of claims arising 16
from the same occurrence to an amount less than the amount of coverage provided under 17
this section. 18
(b) The uninsured motorist coverage required by this section does not apply to a 19
motor vehicle liability insurance policy: 20
(1) that insures a motor vehicle that: 21
(i) is not subject to registration under § 13 –402 of the 22
Transportation Article because it is not driven on a highway; or 23
(ii) is exempt from registration under § 13–402(c)(10) of the 24
Transportation Article; or 25
(2) if the first named insured under a policy or binder of private passenger 26
motor vehicle liability insurance has [elected to obtain] NOT WAIVED AND THEREFORE 27
MAINTAINS enhanced underinsured motorist coverage under § 19–509.1 of this subtitle 28
[instead of the uninsured motorist coverage required under this section]. 29
(c) In addition to any other coverage required by this subtitle, each motor vehicle 30
liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall 31
contain coverage for damages, subject to the policy limits, that: 32 HOUSE BILL 128 3
(1) the insured is entitled to recover from the owner or operator of an 1
uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 2
arising out of the ownership, maintenance, or use of the uninsured motor vehicle; 3
(2) the insured is entitled to recover from the owner or operator of an 4
uninsured 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 uninsured 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 uninsured motor vehicle. 10
19–509.1. 11
(a) In this section, “underinsured motor vehicle” means a motor vehicle that has 12
liability coverage in an amount less than, more than, or equal to the uninsured motorist 13
coverage provided under the insured party’s motor vehicle liability insurance policy. 14
(b) The enhanced underinsured motorist coverage required by this section does 15
not apply to a motor vehicle liability insurance policy: 16
(1) that insures a motor vehicle that: 17
(i) is not subject to registration under § 13 –402 of the 18
Transportation Article because it is not driven on a highway; or 19
(ii) is exempt from registration under § 13–402(c)(10) of the 20
Transportation Article; or 21
(2) [when] IF a first named insured under a NEW policy or binder of private 22
passenger motor vehicle liability insurance ISSUED ON OR AFTER JULY 1, 2024, has [not 23
elected to obtain] WAIVED enhanced underinsured motorist coverage under this section 24
[instead of the uninsured motorist coverage required under § 19–509 of this subtitle]; OR 25
(3) IF A FIRST NAMED INS URED ON A RENEWAL PO LICY ISSUED 26
BEFORE JULY 1, 2024, HAS NOT ELECTED TO O BTAIN ENHANCED UNDERINSURE D 27
MOTORIST COVERAGE UN DER THIS SECTION . 28
(c) (1) [An] UNLESS WAIVED IN ACCO RDANCE WITH THIS SUB SECTION, 29
AN insurer shall [offer] PROVIDE enhanced underinsured motorist coverage [at the time 30
of purchase of a private passenger motor vehicle liability insurance policy]. 31
(2) (I) The first named insured under a policy or binder of private 32
passenger motor vehicle liability insurance may elect to [obtain] WAIVE enhanced 33 4 HOUSE BILL 128
underinsured motorist coverage AND instead [of the] MAINTAIN uninsured motorist 1
coverage required under § 19–509 of this subtitle. 2
(II) IF THE FIRST NAMED IN SURED DOES NOT WISH TO OBTAIN 3
THE ENHANCED UNDERIN SURED MOTORIST COVER AGE UNDER THIS SECTI ON, THE 4
FIRST NAMED INSURED SHALL MAKE AN AFFIRM ATIVE WRITTEN STATEM ENT 5
WAIVING THE COVERAGE . 6
(III) A WAIVER MADE UNDER TH IS SUBSECTION IS NOT 7
EFFECTIVE UNLESS , BEFORE THE WAIVER , THE INSURER GIVES TH E FIRST NAMED 8
INSURED WRITTEN NOTI CE OF THE NATURE , EXTENT, BENEFIT, AND COST OF THE 9
LEVEL OF THE ENHANCE D UNDERINSURED MOTO RIST COVERAGE BEING WAIVED. 10
(IV) 1. A WAIVER MADE UNDER TH IS SUBSECTION SHALL BE 11
MADE ON THE FORM THA T THE COMMISSIONER REQUIRES . 12
2. THE FORM MAY BE PART OF THE INSURANCE 13
CONTRACT. 14
3. THE FORM SHALL CLEARL Y AND CONCISELY EXPL AIN 15
IN AT LEAST 10 14 POINT BOLDFACE TYPE : 16
A. THE NATURE , EXTENT, BENEFIT, AND COST OF THE 17
LEVEL OF THE ENHANCE D UNDERINSURED MOTOR IST COVERAGE THAT WO ULD BE 18
PROVIDED UNDER THE P OLICY IF NOT WAIVED BY THE FIRST NAMED I NSURED; 19
B. THAT A FAILURE OF TH E FIRST NAMED INSURED TO 20
MAKE A WAIVER REQUIR ES THE INSURER TO PR OVIDE ENHANCED UNDER INSURED 21
MOTORIST COVERAGE ; 22
C. THAT THE INSURER MAY NOT REFUSE TO 23
UNDERWRITE A PERSON BECAUSE THE PERSON R EFUSES TO WAIVE THE ENHANCED 24
UNDERINSURED MOTORIS T COVERAGE UNDER THI S SUBSECTION; AND 25
D. THAT A WAIVER MADE U NDER THIS SUBSECTION MUST 26
BE AN AFFIRMATIVE WR ITTEN WAIVER. 27
(V) IF THE FIRST NAMED IN SURED DOES NOT MAKE AN 28
AFFIRMATIVE WRITTEN STATEMENT WAIVING TH E ENHANCED UNDERINSU RED 29
MOTORIST COVERAGE , THE INSURER SHALL PROVIDE THE COVERAGE UNDER THIS 30
SECTION. 31
(3) Unless the first named insured affirmatively makes a change in 32
writing, the election to [obtain] WAIVE enhanced underinsured motorist coverage applies 33 HOUSE BILL 128 5
to all subsequent renewals of coverage and to all other policies or endorsements that extend, 1
change, supersede, or replace an existing private passenger motor vehicle insurance policy 2
issued to the first named insured. 3
(d) In addition to any other coverage required by this subtitle, each private 4
passenger motor vehicle liability insurance policy issued, sold, or delivered in the State on 5
or after July 1, [2018] 2024, to an insured that [elects to obtain] MAINTAINS enhanced 6
underinsured motorist coverage instead of the uninsured motorist coverage required under 7
§ 19–509 of this subtitle shall contain coverage for damages, subject to the policy limits, 8
that: 9
(1) the insured is entitled to recover from the owner or operator of an 10
underinsured motor vehicle because of bodily injuries sustained in a motor vehicle accident 11
arising out of the ownership, maintenance, or use of the underinsured motor vehicle; 12
(2) the insured is entitled to recover from the owner or operator of an 13
underinsured motor vehicle because of property damage, including loss of use of the insured 14
vehicle; and 15
(3) a surviving relative of the insured, who is described in § 3–904 of the 16
Courts Article, is entitled to recover from the owner or operator of an underinsured motor 17
vehicle because the insured died as the result of a motor vehicle accident arising out of the 18
ownership, maintenance, or use of the underinsured motor vehicle. 19
(e) The [offer of] enhanced underinsured motorist coverage required by this 20
section shall be on the form that the Commissioner requires. 21
(f) (1) The enhanced underinsured motorist coverage contained in a private 22
passenger motor vehicle liability insurance policy: 23
(i) shall at least equal: 24
1. the amounts required by Title 17 of the Transportation 25
Article for bodily injury and property damage, including loss of use of the insured vehicle; 26
and 27
2. the coverage provided to a qualified person under Title 20, 28
Subtitle 6 of this article; and 29
(ii) may not exceed the amount of liability coverage provided under 30
the policy. 31
(2) The amount of enhanced underinsured motorist coverage provided 32
under a private passenger motor vehicle liability insurance policy shall equal the amount 33
of liability coverage provided under the policy. 34
6 HOUSE BILL 128
(g) An insurer may exclude from the enhanced underinsured motorist coverage 1
required by this section benefits for: 2
(1) the named insured or a family member of the named insured who 3
resides in the named insured’s household for an injury that occurs when the named insured 4
or family member is occupying or is struck as a pedestrian by an underinsured motor 5
vehicle that is owned by the named insured or an immediate family member of the named 6
insured who resides in the named insured’s household; and 7
(2) the named insured, a family member of the named insured who resides 8
in the named insured’s household, and any other individual who has other applicable motor 9
vehicle insurance for an injury that occurs when the named insured, family member, or 10
other individual is occupying or is struck as a pedestrian by the insured motor vehicle while 11
the motor vehicle is operated or used by an individual who is excluded from coverage under 12
§ 27–609 of this article. 13
(h) The limit of liability for an insurer that provides enhanced underinsured 14
motorist coverage under this section: 15
(1) is subject to § 19–511.1 of this subtitle; and 16
(2) is the amount of that coverage without any reduction for the amount 17
paid to the insured, that exhausts any applicable liability insurance policies, bonds, and 18
securities, on behalf of any person that may be held liable for the bodily injuries or death 19
of the insured. 20
(i) (1) A policy that, as its primary purpose, provides coverage in excess of 21
other valid and collectible insurance or qualified self–insurance may include the enhanced 22
underinsured motorist coverage provided for in this section. 23
(2) The enhanced underinsured motorist coverage required by this section 24
is primary to any right to recovery from the Maryland Automobile Insurance Fund under 25
Title 20, Subtitle 6 of this article. 26
(j) An endorsement or a provision that protects the insured against damages 27
caused by an underinsured motor vehicle that is contained in a policy issued and delivered 28
in the State is deemed to cover damages caused by a motor vehicle insured by a liability 29
insurer that is insolvent or otherwise unable to pay claims to the same extent and in the 30
same manner as if the damages were caused by an underinsured motor vehicle. 31
(k) A provision in a private passenger motor vehicle liability insurance policy 32
issued on or after July 1, 2018, about coverage for damages sustained by the insured as a 33
result of the operation of an underinsured motor vehicle that requires a dispute between 34
the insured and the insurer to be submitted to binding arbitration is prohibited and is of 35
no legal effect. 36
19–510. 37 HOUSE BILL 128 7
(a) This section applies only when: 1
(1) the liability coverage under a policy or binder of private passenger 2
motor vehicle liability insurance exceeds the amount required under § 17–103 of the 3
Transportation Article; and 4
(2) the first named insured under a policy or binder of private passenger 5
motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced 6
underinsured motorist coverage under § 19–509.1 of this subtitle AND instead [of the] 7
MAINTAINS uninsured motorist coverage required under § 19–509 of this subtitle 8
UNINSURED MOTORIST C OVERAGE REQUIRED UND ER § 19–509 OF THIS SUBTITLE 9
AND HAS NOT OBTAINED ENHANCED UNDERINSURE D MOTORIST COVERAGE UNDER 10
§ 19–509.1 OF THIS SUBTITLE . 11
(b) (1) If the first named insured under a policy or binder of private passenger 12
motor vehicle liability insurance does not wish to obtain uninsured motorist coverage in the 13
same amount as the liability coverage provided under the policy or binder, the first named 14
insured shall make an affirmative written waiver of having uninsured motorist coverage in 15
the same amount as the liability coverage. 16
(2) If the first named insured does not make an affirmative written waiver 17
under this section, the insurer shall provide uninsured motorist coverage in an amount 18
equal to the amount of the liability coverage provided under the policy or binder. 19
19–511. 20
(a) This section [does not apply] APPLIES ONLY when the first named insured 21
under a policy or binder of private passenger motor vehicle liability insurance has [elected 22
to obtain] WAIVED enhanced underinsured motorist coverage under § 19–509.1 of this 23
subtitle AND instead [of the] MAINTAINS uninsured motorist coverage required under § 24
19–509 of this subtitle. 25
(b) If an injured person receives a written offer from a motor vehicle insurance 26
liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or 27
death, and the amount of the settlement offer, in combination with any other settlements 28
arising out of the same occurrence, would exhaust the bodily injury or death limits of the 29
applicable liability insurance policies, bonds, and securities, the injured person shall send 30
by certified mail, to any insurer that provides uninsured motorist coverage for the bodily 31
injury or death, a copy of the liability insurer’s written settlement offer. 32
19–511.1. 33
(a) This section applies only when the first named insured under a policy or 34
binder of private passenger motor vehicle liability insurance has [elected to obtain] NOT 35
WAIVED AND THEREFORE MAINTAINS enhanced underinsured motorist coverage under 36 8 HOUSE BILL 128
§ 19–509.1 of this subtitle [instead of the uninsured motorist coverage required under § 1
19–509 of this subtitle]. 2
(b) If an injured person receives a written offer from a motor vehicle liability 3
insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and 4
the amount of the settlement offer, in combination with any other settlements arising out 5
of the same occurrence, would exhaust the bodily injury or death limits of the applicable 6
liability insurance policies, bonds, and securities, the injured person shall send by certified 7
mail, to any insurer that provides enhanced underinsured motorist coverage for the bodily 8
injury or death, a copy of the liability insurer’s written settlement offer. 9
SECTION 2. AND BE IT FURTHER ENACTED, That: 10
(a) The Maryland Insurance Administration shall conduct a study on the impact 11
of converting enhanced underinsured motorist coverage under private passenger motor 12
vehicle liability insurance from an opt–in coverage option to an opt–out coverage option. 13
(b) The study shall include: 14
(1) a comparison of the rate of selection of enhanced underinsured motorist 15
coverage before and after the implementation of this Act; 16
(2) an analysis of the impact on premiums from enhanced underinsured 17
motorist coverage being offered as a default selection for coverage, including the 18
identification and analysis of any factors contributing to any observed impact on premiums 19
relating to the offering of enhanced underinsured motorist coverage as a default selection for 20
coverage; 21
(3) to the extent information is available, an analysis of the impact of the 22
offering of enhanced underinsured motorist coverage as a default option on compensation 23
for damages resulting from motor vehicle accidents, including the impact on out–of–pocket 24
costs incurred by insureds for damages exceeding policy limits; 25
(4) a review of notice and waiver procedures relating to the offering of 26
enhanced underinsured motorist coverage as a default coverage option to: 27
(i) assess whether consumers are aware of the uninsured motorist 28
and enhanced underinsured motorist coverage options and able to make an informed 29
selection from the description of the coverage options and the per vehicle premium associated 30
with each option; and 31
(ii) make recommendations regarding any changes to notice and 32
coverage selection procedures to improve consumer awareness and informed decision 33
making regarding uninsured motorist and enhanced underinsured motorist coverage; and 34
HOUSE BILL 128 9
(5) any other relevant matters relating to the offering of uninsured motorist 1
and enhanced underinsured motorist coverage by private passenger motor vehicle liability 2
insurers. 3
(c) (1) On or before December 31, 2026, the Maryland Insurance 4
Administration shall submit an interim report to the Governor and, in accordance with § 5
2–1257 of the State Government Article, the Senate Finance Committee and the House 6
Economic Matters Committee that includes any initial findings and recommendations from 7
the study required under this section. 8
(2) On or before December 31, 2028, the Maryland Insurance 9
Administration shall submit a final report to the Governor and, in accordance with § 2–1257 10
of the State Government Article, the Senate Finance Committee and the House Economic 11
Matters Committee that includes the findings and recommendations from the study required 12
under this section. 13
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act applies to each 14
policy of private passenger motor vehicle insurance issued, sold, or delivered in the State 15
on or after July 1, 2024. 16
SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shal l take effect 17
October 1, 2023. It shall remain effective for a period of 5 years and 8 months, and, at the 18
end of June 30, 2029, this Act, with no further action required by the General Assembly, 19
shall be abrogated and of no further force and effect. 20
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.