WES MOORE, Governor Ch. 514
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Chapter 514
(House Bill 128)
AN ACT concerning
Private Passenger Motor Vehicle Liability Insurance – Enhanced Underinsured
Motorist Coverage – Opt–Out Option
FOR the purpose of converting enhanced underinsured motorist coverage from an opt–in
offering of coverage into an opt–out coverage option under certain provisions of law
establishing requirements for private passenger motor vehicle liability insurance;
and generally relating to private passenger motor vehicle liability insurance.
BY repealing and reenacting, without amendments,
Article – Insurance
Section 19–509(a) and (c), 19–510(b), 19–511(b), and 19–511.1(b)
Annotated Code of Maryland
(2017 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with amendments,
Article – Insurance
Section 19–509(b), 19–509.1, 19–510(a), 19–511(a), and 19–511.1(a)
Annotated Code of Maryland
(2017 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Insurance
19–509.
(a) In this section, “uninsured motor vehicle” means a motor vehicle:
(1) the ownership, maintenance, or use of which has resulted in the bodily
injury or death of an insured; and
(2) for which the sum of the limits of liability under all valid and collectible
liability insurance policies, bonds, and securities applicable to bodily injury or death:
(i) is less than the amount of coverage provided under this section;
or
(ii) has been reduced by payment to other persons of claims arising
from the same occurrence to an amount less than the amount of coverage provided under
this section. Ch. 514 2023 LAWS OF MARYLAND
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(b) The uninsured motorist coverage required by this section does not apply to a
motor vehicle liability insurance policy:
(1) that insures a motor vehicle that:
(i) is not subject to registration under § 13 –402 of the
Transportation Article because it is not driven on a highway; or
(ii) is exempt from registration under § 13–402(c)(10) of the
Transportation Article; or
(2) if the first named insured under a policy or binder of private passenger
motor vehicle liability insurance has [elected to obtain] NOT WAIVED AND TH EREFORE
MAINTAINS enhanced underinsured motorist coverage under § 19–509.1 of this subtitle
[instead of the uninsured motorist coverage required under this section].
(c) In addition to any other coverage required by this subtitle, each motor vehicle
liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall
contain coverage for damages, subject to the policy limits, that:
(1) the insured is entitled to recover from the owner or operator of an
uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident
arising out of the ownership, maintenance, or use of the uninsured motor vehicle;
(2) the insured is entitled to recover from the owner or operator of an
uninsured motor vehicle because of property damage, including loss of use of the insured
vehicle; and
(3) a surviving relative of the insured, who is described in § 3–904 of the
Courts Article, is entitled to recover from the owner or operator of an uninsured motor
vehicle because the insured died as the result of a motor vehicle accident arising out of the
ownership, maintenance, or use of the uninsured motor vehicle.
19–509.1.
(a) In this section, “underinsured motor vehicle” means a motor vehicle that has
liability coverage in an amount less than, more than, or equal to the uninsured motorist
coverage provided under the insured party’s motor vehicle liability insurance policy.
(b) The enhanced underinsured motorist coverage required by this section does
not apply to a motor vehicle liability insurance policy:
(1) that insures a motor vehicle that:
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(i) is not subject to registration under § 13 –402 of the
Transportation Article because it is not driven on a highway; or
(ii) is exempt from registration under § 13–402(c)(10) of the
Transportation Article; or
(2) [when] IF a first named insured under a NEW policy or binder of private
passenger motor vehicle liability insurance ISSUED ON OR AFTER JULY 1, 2024, has [not
elected to obtain] WAIVED enhanced underinsured motorist coverage under this section
[instead of the uninsured motorist coverage required under § 19–509 of this subtitle]; OR
(3) IF A FIRST NAMED INS URED ON A RENEWAL PO LICY ISSUED
BEFORE JULY 1, 2024, HAS NOT ELECTED TO OBTAIN EN HANCED UNDERINSURED
MOTORIST COVERAGE UN DER THIS SECTION .
(c) (1) [An] UNLESS WAIVED IN ACCO RDANCE WITH THIS SUB SECTION,
AN insurer shall [offer] PROVIDE enhanced underinsured motorist coverage [at the time
of purchase of a private passenger motor vehicle liability insurance policy].
(2) (I) The first named insured under a policy or binder of private
passenger motor vehicle liability insurance may elect to [obtain] WAIVE enhanced
underinsured motorist coverage AND instead [of the] MAINTAIN uninsured motorist
coverage required under § 19–509 of this subtitle.
(II) IF THE FIRST NAMED IN SURED DOES NOT WISH TO OBTAIN
THE ENHANCED UNDERIN SURED MOTORIST COVER AGE UNDER THIS SECTI ON, THE
FIRST NAMED INSURED SHALL MAKE AN AFFIRM ATIVE WRITTEN STATEMENT
WAIVING THE COVERAGE .
(III) A WAIVER MADE UNDER TH IS SUBSECTION IS NOT
EFFECTIVE UNLESS , BEFORE THE WAIVER , THE INSURER GIVES TH E FIRST NAMED
INSURED WRITTEN NOTI CE OF THE NATURE , EXTENT, BENEFIT, AND COST OF THE
LEVEL OF THE ENHANCE D UNDERINSURED MOTORIST COVERAGE BEING WAIVE D.
(IV) 1. A WAIVER MADE UNDER TH IS SUBSECTION SHALL BE
MADE ON THE FORM THA T THE COMMISSIONER REQUIRES .
2. THE FORM MAY BE PART OF THE INSURANCE
CONTRACT.
3. THE FORM SHALL CLEARL Y AND CONCISELY EXPL AIN
IN AT LEAST 10 14 POINT BOLDFACE TYPE :
Ch. 514 2023 LAWS OF MARYLAND
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A. THE NATURE , EXTENT, BENEFIT, AND COST OF THE
LEVEL OF THE ENHANCE D UNDERINSURED MOTOR IST COVERAGE THAT WO ULD BE
PROVIDED UNDER THE P OLICY IF NOT WAIVED BY THE FIRST NAMED INSURED ;
B. THAT A FAILURE OF TH E FIRST NAMED INSURE D TO
MAKE A WAIVER REQUIR ES THE INSURER TO PR OVIDE ENHANCED UNDER INSURED
MOTORIST COVERAGE ;
C. THAT THE INSURER MAY NOT REFUSE TO
UNDERWRITE A PERSON BECAUSE THE PERSON R EFUSES TO WAIVE THE ENHANCED
UNDERINSURED MOTORIS T COVERAGE UNDER THI S SUBSECTION; AND
D. THAT A WAIVER MADE U NDER THIS SUBSECTION MUST
BE AN AFFIRMATIVE WR ITTEN WAIVER.
(V) IF THE FIRST NAMED IN SURED DOES NOT MAKE AN
AFFIRMATIVE WRITTEN STATEMENT WAIVING TH E ENHANCED UNDERINSURED
MOTORIST COVERAGE , THE INSURER SHALL PR OVIDE THE COVERAGE U NDER THIS
SECTION.
(3) Unless the first named insured affirmatively makes a change in
writing, the election to [obtain] WAIVE enhanced underinsured motorist coverage applies
to all subsequent renewals of coverage and to all other policies or endorsements that extend,
change, supersede, or replace an existing private passenger motor vehicle insurance policy
issued to the first named insured.
(d) In addition to any other coverage required by this subtitle, each private
passenger motor vehicle liability insurance policy issued, sold, or delivered in the State on
or after July 1, [2018] 2024, to an insured that [elects to obtain] MAINTAINS enhanced
underinsured motorist coverage instead of the uninsured motorist coverage required under
§ 19–509 of this subtitle shall contain coverage for damages, subject to the policy limits,
that:
(1) the insured is entitled to recover from the owner or operator of an
underinsured motor vehicle because of bodily injuries sustained in a motor vehicle accident
arising out of the ownership, maintenance, or use of the underinsured motor vehicle;
(2) the insured is entitled to recover from the owner or operator of an
underinsured motor vehicle because of property damage, including loss of use of the insured
vehicle; and
(3) a surviving relative of the insured, who is described in § 3–904 of the
Courts Article, is entitled to recover from the owner or operator of an underinsured motor
vehicle because the insured died as the result of a motor vehicle accident arising out of the
ownership, maintenance, or use of the underinsured motor vehicle. WES MOORE, Governor Ch. 514
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(e) The [offer of] enhanced underinsured motorist coverage required by this
section shall be on the form that the Commissioner requires.
(f) (1) The enhanced underinsured motorist coverage contained in a private
passenger motor vehicle liability insurance policy:
(i) shall at least equal:
1. the amounts required by Title 17 of the Transportation
Article for bodily injury and property damage, including loss of use of the insured vehicle;
and
2. the coverage provided to a qualified person under Title 20,
Subtitle 6 of this article; and
(ii) may not exceed the amount of liability coverage provided under
the policy.
(2) The amount of enhanced underinsured motorist coverage provided
under a private passenger motor vehicle liability insurance policy shall equal the amount
of liability coverage provided under the policy.
(g) An insurer may exclude from the enhanced underinsured motorist coverage
required by this section benefits for:
(1) the named insured or a family member of the named insured who
resides in the named insured’s household for an injury that occurs when the named insured
or family member is occupying or is struck as a pedestrian by an underinsured motor
vehicle that is owned by the named insured or an immediate family member of the named
insured who resides in the named insured’s household; and
(2) the named insured, a family member of the named insured who resides
in the named insured’s household, and any other individual who has other applicable motor
vehicle insurance for an injury that occurs when the named insured, family member, or
other individual is occupying or is struck as a pedestrian by the insured motor vehicle while
the motor vehicle is operated or used by an individual who is excluded from coverage under
§ 27–609 of this article.
(h) The limit of liability for an insurer that provides enhanced underinsured
motorist coverage under this section:
(1) is subject to § 19–511.1 of this subtitle; and
(2) is the amount of that coverage without any reduction for the amount
paid to the insured, that exhausts any applicable liability insurance policies, bonds, and Ch. 514 2023 LAWS OF MARYLAND
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securities, on behalf of any person that may be held liable for the bodily injuries or death
of the insured.
(i) (1) A policy that, as its primary purpose, provides coverage in excess of
other valid and collectible insurance or qualified self–insurance may include the enhanced
underinsured motorist coverage provided for in this section.
(2) The enhanced underinsured motorist coverage required by this section
is primary to any right to recovery from the Maryland Automobile Insurance Fund under
Title 20, Subtitle 6 of this article.
(j) An endorsement or a provision that protects the insured against damages
caused by an underinsured motor vehicle that is contained in a policy issued and delivered
in the State is deemed to cover damages caused by a motor vehicle insured by a liability
insurer that is insolvent or otherwise unable to pay claims to the same extent and in the
same manner as if the damages were caused by an underinsured motor vehicle.
(k) A provision in a private passenger motor vehicle liability insurance policy
issued on or after July 1, 2018, about coverage for damages sustained by the insured as a
result of the operation of an underinsured motor vehicle that requires a dispute between
the insured and the insurer to be submitted to binding arbitration is prohibited and is of
no legal effect.
19–510.
(a) This section applies only when:
(1) the liability coverage under a policy or binder of private passenger
motor vehicle liability insurance exceeds the amount required under § 17–103 of the
Transportation Article; and
(2) the first named insured under a policy or binder of private passenger
motor vehicle liability insurance has [not elected to obtain] WAIVED enhanced
underinsured motorist coverage under § 19–509.1 of this subtitle AND instead [of the]
MAINTAINS uninsured motorist coverage required under § 19–509 of this subtitle
UNINSURED MOTORIST C OVERAGE REQUIRED UND ER § 19–509 OF THIS SUBTITLE
AND HAS NOT OBTAINED ENHANCED UNDERINSURE D MOTORIST COVERAGE UNDER
§ 19–509.1 OF THIS SUBTITLE.
(b) (1) If the first named insured under a policy or binder of private passenger
motor vehicle liability insurance does not wish to obtain uninsured motorist coverage in the
same amount as the liability coverage provided under the policy or binder, the first named
insured shall make an affirmative written waiver of having uninsured motorist coverage in
the same amount as the liability coverage.
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(2) If the first named insured does not make an affirmative written waiver
under this section, the insurer shall provide uninsured motorist coverage in an amount
equal to the amount of the liability coverage provided under the policy or binder.
19–511.
(a) This section [does not apply] APPLIES ONLY when the first named insured
under a policy or binder of private passenger motor vehicle liability insurance has [elected
to obtain] WAIVED enhanced underinsured motorist coverage under § 19–509.1 of this
subtitle AND instead [of the] MAINTAINS uninsured motorist coverage required under §
19–509 of this subtitle.
(b) If an injured person receives a written offer from a motor vehicle insurance
liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or
death, and the amount of the settlement offer, in combination with any other settlements
arising out of the same occurrence, would exhaust the bodily injury or death limits of the
applicable liability insurance policies, bonds, and securities, the injured person shall send
by certified mail, to any insurer that provides uninsured motorist coverage for the bodily
injury or death, a copy of the liability insurer’s written settlement offer.
19–511.1.
(a) This section applies only when the first named insured under a policy or
binder of private passenger motor vehicle liability insurance has [elected to obtain] NOT
WAIVED AND THEREFORE MAINTAINS enhanced underinsured motorist coverage under
§ 19–509.1 of this subtitle [instead of the uninsured motorist coverage required under §
19–509 of this subtitle].
(b) If an injured person receives a written offer from a motor vehicle liability
insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and
the amount of the settlement offer, in combination with any other settlements arising out
of the same occurrence, would exhaust the bodily injury or death limits of the applicable
liability insurance policies, bonds, and securities, the injured person shall send by certified
mail, to any insurer that provides enhanced underinsured motorist coverage for the bodily
injury or death, a copy of the liability insurer’s written settlement offer.
SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) The Maryland Insurance Administration shall conduct a study on the impact
of converting enhanced underinsured motorist coverage under private passenger motor
vehicle liability insurance from an opt–in coverage option to an opt–out coverage option.
(b) The study shall include:
(1) a comparison of the rate of selection of enhanced underinsured motorist
coverage before and after the implementation of this Act; Ch. 514 2023 LAWS OF MARYLAND
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(2) an analysis of the impact on premiums from enhanced underinsured
motorist coverage being offered as a default selection for coverage, including the
identification and analysis of any factors contributing to any observed impact on premiums
relating to the offering of enhanced underinsured motorist coverage as a default selection for
coverage;
(3) to the extent information is available, an analysis of the impact of the
offering of enhanced underinsured motorist coverage as a default option on compensation
for damages resulting from motor vehicle accidents, including the impact on out–of–pocket
costs incurred by insureds for damages exceeding policy limits;
(4) a review of notice and waiver procedures relating to the offering of
enhanced underinsured motorist coverage as a default coverage option to:
(i) assess whether consumers are aware of the uninsured motorist
and enhanced underinsured motorist coverage options and able to make an informed
selection from the description of the coverage options and the per vehicle premium associated
with each option; and
(ii) make recommendations regarding any changes to notice and
coverage selection procedures to improve consumer awareness and informed decision
making regarding uninsured motorist and enhanced underinsured motorist coverage; and
(5) any other relevant matters relating to the offering of uninsured motorist
and enhanced underinsured motorist coverage by private passenger motor vehicle liability
insurers.
(c) (1) On or before December 31, 2026, the Maryland Insurance
Administration shall submit an interim report to the Governor and, in accordance with §
2–1257 of the State Government Article, the Senate Finance Committee and the House
Economic Matters Committee that includes any initial findings and recommendations from
the study required under this section.
(2) On or before December 31, 2028, the Maryland Insurance
Administration shall submit a final report to the Governor and, in accordance with § 2–1257
of the State Government Article, the Senate Finance Committee and the House Economic
Matters Committee that includes the findings and recommendations from the study required
under this section.
SECTION 2. 3. AND BE IT FURTHER ENACTED, Tha t this Act applies to each
policy of private passenger motor vehicle insurance issued, sold, or delivered in the State
on or after July 1, 2024.
SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023. It shall remain effective for a period of 5 years and 8 months, and, at the WES MOORE, Governor Ch. 514
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end of June 30, 2029, this Act, with no further action required by the General Assembly,
shall be abrogated and of no further force and effect.
Approved by the Governor, May 8, 2023.