What is An Uninsured or UnderInsured Motorist Claim Under Maryland Car Accident Law?

What is an Uninsured or Underinsured motorist claim under Maryland car accident law?

When you are involved in an accident that is the fault of another driver who either has no insurance (Uninsured)or not enough insurance(underinsured) or has statutory immunity, you may be able to file a claim with your insurance company. If you are successful, then your insurance company will step in and pay some or all of your claim as if they insured the at fault vehicle. You will not be penalized for filing the uninsured motorist claim with your insurance company. Your rates cannot be raised and you will not be cancelled for claims paid under this portion of your policy. Even if your insurance company pays under the uninsured motorist portion of your policy, the at fault party will still be responsible, as your insurance company will likely sue the uninsured motorist to collect back the money they had to pay to you.

Uninsured or Underinsured motorist claim coverage is based on a showing of fault.

The insurer does not pay benefits to its insured unless and until the liability of the uninsured or underinsured at fault party is established. (the negligent conduct of a third party) Moreover, the insurer has the right to defend the insured’s claim for Uninsured or Underinsured motorist benefits by asserting all the defenses that an at fault party possesses.

underinsured motorist

To make a claim under Uninsured or Underinsured motorist insurance the at fault vehicle must meet one of the many definitions of uninsured motor vehicle:

  1. An inadequately insured motor vehicle
  2. where the tortfeasor’s (at fault party) vehicle has insurance from another state but that insurance does not meet the statutory minimum limits. Thus, a vehicle insured in a state other than Maryland having liability limits less than Maryland’s statutory minimum coverage requirement is considered an “uninsured motor vehicle” even though it has insurance. Assume that the vehicle has liability limits of $ 10,000/$ 20,000/$ 10,000. If the injured claimant has UM limits of $ 30,000/$ 60.000/$ 30,000 (the Maryland statutory minimum), the tortfeasor’s vehicle is an “uninsured motor vehicle.” In that situation, the claimant is entitled to collect an additional $ 20,000 from the UM insurer for his or her bodily injury ($ 30,000 UM limit – $ 10,000 liability limit = $ 10,000 collectible UM available).
  3. An underinsured motor vehicle- no election for enhanced uninsured motorist after July 1, 2018 or all underinsured motorist claims before July 1 2018.
  4. If the tortfeasor’s liability limit equals or exceeds Maryland’s statutory minimum limit ($ 30,000/$ 60,000/$ 15,000), that vehicle can still be an “uninsured motor vehicle” if the claimant’s UM limit is greater than the tortfeasor’s limit. Hence, if the claimant has UM coverage of $ 30,000/$ 60,000/$ 15,000, the tortfeasor’s vehicle is not an “uninsured motor vehicle” On the other hand, if the claimant has UM coverage of $ 50,000/$ 100,000/$ 15,000, the tortfeasor’s vehicle is an “uninsured motor vehicle”
  5. A vehicle whose liability limits are diminished because of payments to multiple claimants
  6. Suppose a tortfeasor, has liability limits of $ 50,000/$ 100,000, and injures five people. The five persons divided the $ 100,000 five ways, with each receiving $ 20,000. One of the injured persons has an insurance policy that provides UM coverage of $ 25,000/$ 50,000. Under the Uninsured motorist law, that claimant should be able to collect $ 5,000 in UM benefits because the tortfeasor’s vehicle qualifies as an “uninsured motor vehicle”
  7. A phantom or hit-and-run vehicle
  8. This type of claim encompasses what are commonly called phantom vehicles or hit-and-run vehicles. ”Hit-and-run” is somewhat of a misnomer: the vehicle need not “hit” anything. That is, physical contact with the phantom vehicle is not necessary.
  9. A vehicle with no liability insurance because of an insurer’s denial of coverage
  10. Liability insurers often deny coverage to their insureds, or putative insureds, based on a policy provision such as an intentional act exclusion or a non-permissive use exclusion. When an insurer denies coverage, it is asserting that coverage never existed. The definition does not state that the liability insurer must rightfully deny coverage. For instance, suppose the liability incorrectly insurer denies coverage based on non-permissive use. This should not matter, and the claimant should not have to prove that the liability insurer denied coverage properly. All the claimant should have to prove is that the denial occurred. And this is easily done, with the denial letter as the prime piece of evidence. Should the UM insurer dispute the validity of the liability insurer’s denial , the UM insurer can bring a declaratory judgment action to litigate the matter. This can be done before or after the UM insurer has paid UM benefits to the claimant.
  11. Disclaimer of coverage- A disclaimer of coverage is not, however, the functional equivalent of a denial of coverage. A disclaimer exists when there is insurance, but the insurer can escape its obligation because the insured has breached some policy provision, most notably the notification and cooperation clauses. The definition does not state that the liability insurer must rightfully disclaim coverage. For instance, suppose the liability incorrectly insurer disclaims coverage based on cooperation of the insured. This should not matter, and the claimant should not have to prove that the liability insurer disclaimed coverage properly. All the claimant should have to prove is that the disclaimer occurred. And this is easily done, with the disclaimer letter as the prime piece of evidence. Should the UM insurer dispute the validity of the liability insurer’s disclaimer, the UM insurer can bring a declaratory judgment action to litigate the matter. This can be done before or after the UM insurer has paid UM benefits to the claimant.
  12. A vehicle operated by a non-permissive user when the claimant is a passenger
  13. In such a situation, the passenger would be left to seeking UM benefits from his or her own personal policy.
  14. A vehicle owned or operated by a person protected by a tort immunity
  15. An issue that occasionally arises on is whether an insured motor vehicle is converted into an ”uninsured motor vehicle” because the owner or operator is protected by a tort immunity. This issue has been considered by the court of appeals on two occasions. A motor vehicle does not become an ”uninsured motor vehicle” because the owner or operator is cloaked with immunity is evidently limited to instances involving parental immunity.
  16. Recently, the Maryland court of appeals held that a vehicle whose operator and owner were protected by sovereign immunity, qualified as an “uninsured motor vehicle” Popa, was killed when his vehicle was struck by a speeding Maryland state police car. At the time of the accident, the Maryland State police and the State of Maryland had only $50,000 of liability insurance and were immune under the Maryland Tort Claims Act above that insurance. At the time of the accident, Jonathan was insured under a motor vehicle policy issued by West American that provided $ 300,000 of UM coverage. The Court of Appeals determined that West American’s argument that the immunity that applied to the state trooper barred them from recovering UM benefits was rejected.
  17. A non-insured vehicle operated or owned by a person who is a joint tortfeasor with the operator or owner of an insured vehicle
  18. When both the negligence of an uninsured motorist and the negligence of an insured motorist jointly cause an injury, the claimant must recover, first, from the liability policy covering the insured vehicle. Then, if the limit of available liability coverage is less than the limit of the claimant’s UM coverage, the claimant can seek indemnification from the UM insurer. If the claimant’s UM coverage is less than or equal to the available liability insurance, then the claimant is not entitled to recover any UM benefits.
  19. New Underinsured motorist statute MD Code, Insurance, § 19-509.1Enhanced underinsured motorist coverage-effective July 1 2018
  20. “Underinsured motor vehicle” defined
  21. 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.
  22. The enhanced underinsured motorist coverage required by this section does not apply to a motor vehicle liability insurance policy:
  23. that insures a motor vehicle that:
  24. is not subject to registration under § 13-402 of the Transportation Article because it is not driven on a highway; or
  25. is exempt from registration under § I 3-402(c)(10) of the Transportation Article; or
  • when a first named insured under a policy or binder of private passenger motor vehicle liability insurance has not elected to obtain enhanced underinsured motorist coverage under this section instead of the uninsured motorist coverage required under § 19-509 of this subtitle.

Offer and election of coverage

  1. (c)(1) An insurer shall offer enhanced underinsured motorist coverage at the time of purchase of a private passenger motor vehicle liability insurance policy.
  2. (2) The first named insured under a policy or binder of private passenger motor vehicle liability insurance may elect to obtain enhanced underinsured motorist coverage instead of the uninsured motorist coverage required under § 19-509 of this subtitle.
  3. (3) Unless the first named insured affirmatively makes a change in writing, the election to obtain 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.
  4. Coverage for damage due to bodily injuries or death(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, to an insured that elects to obtain 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:
  5. (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; and
  6. (2) 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.
  7. Form of offer of coverage
  8. (c) The offer of enhanced underinsured motorist coverage required by this section shall be on the form that the Commissioner requires.
  9. Minimum amount of enhanced underinsured motorist coverage
  10. (0(1) The enhanced underinsured motorist coverage contained in a private passenger motor vehicle liability insurance policy:
  11. (i) shall at least equal: the amounts required by Title 17 of the Transportation Article; and the coverage provided to a qualified person under Title 20, Subtitle 6 of this article; and
  12. (ii) may not exceed the amount of liability coverage provided under the policy.
  13. (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.
  14. Exclusions from coverage
  15. (g) An insurer may exclude from the enhanced underinsured motorist coverage required by this section benefits for:
  16. 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
  17. 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.
  18. Limit of liability for insurer
  19. (h) The limit of liability for an insurer that provides enhanced underinsured motorist coverage under this section:
  20. (I) 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 securities, on behalf of any person that may be held liable for the bodily injuries or death of the insured.

Coverage in excess of other valid and collectible insurance or self-insurance

  1. (i)(I) 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. (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.
  3. Liability insurers that are insolvent or otherwise unable to pay claims-(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.
  4. Provisions requiring dispute be submitted to binding arbitration prohibited (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.
  5. 19-511.1 Enhanced underinsured motorist coverage—settlement procedures
  6. (a)  Applicability. — 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 enhanced underinsured motorist coverage under § 19-509.1 of this subtitle instead of the uninsured motorist coverage required under § 19-509 of this subtitle.
  7. (b)  Notice of settlement offer required. — 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.
  • (c)  Response to settlement offer. — Within 60 days after receipt of the notice required under subsection (b) of this section, the enhanced underinsured motorist insurer shall send to the injured person:
  1. (1) written consent to acceptance of the settlement offer and to the execution of releases; or
  2. (2) written refusal to consent to acceptance of the settlement offer.
  3. (d)  Payment of settlement offer. — Within 30 days after a refusal to consent to acceptance of a settlement offer under subsection (c)(2) of this section, the enhanced underinsured motorist insurer shall pay to the injured person the amount of the settlement offer.
  4. (e)  Effect of payment and receipt of payment. –
  5. (1) Payment as described in subsection (d) of this section shall preserve the extended enhanced underinsured motorist insurer’s subrogation rights against the motor vehicle liability insurer and its insured.
  6. (2) Receipt by the injured person of the payment described in subsection (d) of this section shall constitute the assignment, up to the amount of the payment, of any recovery on behalf of the injured person that is subsequently paid from the applicable liability insurance policies, bonds, and securities.
  7. (f)  Acceptance of settlement offer. — The injured person may accept the motor vehicle liability insurer’s settlement offer and execute releases in favor of the liability insurer and its insured without prejudice to any claim the injured person may have against the enhanced underinsured motorist insurer:
  8. (1) on receipt of written consent to acceptance of the settlement offer and to the execution of releases; or
  9. (2) if the enhanced underinsured motorist insurer has not met the requirements of subsection (c) or (d) of this section.
  • (g)  Effect of written consent to accept settlement offer. — Written consent by an enhanced underinsured motorist insurer to acceptance of a settlement offer under subsection (c)(1) of this section:
  1. (1) may not be construed to limit the right of the enhanced underinsured motorist insurer to raise any issue relating to liability or damages in an action against the enhanced underinsured motorist insurer; and
  2. (2) does not constitute an admission by the uninsured motorist insurer as to any issue raised in an action against the enhanced underinsured motorist insurer.

How Do You Collect Uninsured or Underinsured Motorist Benefits when the claim is denied by either the liability carrier or the Uninsured or Underinsured motorist carrier.

The injured insured has three alternatives when pursuing a claim involving an uninsured motorist:

  1. He or she may sue the at fault party in tort, obtain a judgment and then enforce the judgment against the UM insurer.
  2. The injured insured may sue the UM insurer and, as part of his or her case, prove that the at fault party’s negligence proximately caused his or her injuries.
  3. The injured insured may combine the tort and contract claims in a single action.

Proving the vehicle is uninsured

Proving that a vehicle has no insurance can be difficult, and basically akin to proving a negative. The claimant’s burden, is to prove that it is more likely that the vehicle had no insurance. To satisfy this burden usually requires testimony from the at fault party that he or she did not maintain insurance on the vehicle is certainly sufficient, or testimony of that nature from a spouse or other close relative. Testimony from an insurance agent showing that the insurance policy had been canceled before the accident would also be compelling, and evidence from other sources, such as insurance adjusters and the Motor Vehicle Administration, may be sufficient.

Elements to prove uninsured motorist claim

An uninsured motorist claim may be pursued when an

1)insured

2) motor vehicle accident

3) Arising out of the ownership, maintenance, or use of the “uninsured motor vehicle

4) liability of the uninsured at fault party is established

5) must meet one of the many definitions of uninsured motor vehicle

6) The person must be entitled to recover damages from the owner or operator of an uninsured motor vehicle.

7) The person must be entitled to recover the damages because of bodily injury or death (or property damage).

8) The person must not be excluded or otherwise precluded from recovery.

Who Is Eligible?

The person must be an insured

Coverage is extended to the named insured, the named insured’s resident spouse, the named insured’s resident family members, persons driving or riding in the insured vehicle, persons getting in or out of the insured vehicle, and persons who have derivative claims because of injuries to other insureds.

Motor vehicle accident

Section 19-501(c) defines “motor vehicle accident” as “an occurrence involving a motor vehicle that results in damage to property or injury to a person” and “does not include an occurrence that is caused intentionally by or at the direction of the insured.” This broad definition encompasses intentional torts. From the language of the statute, it is clear that when an insured is injured because of someone else’s intentional conduct, the injuring act is an accident. However, if the insured intentionally caused his or her own injury, there is no accident.

Arising out of the ownership, maintenance, or use of the “uninsured motor vehicle”

Motor vehicle liability policies often limit the insurer’s indemnity obligation to liability “arising out of the ownership, maintenance, or use” of a motor vehicle. “Ownership” is fairly self-explanatory. “Maintenance,” refers to “any activity designed to preserve or repair a motor vehicle.” “Use” means “all proper uses of a motor vehicle.” It is not necessary for a motor vehicle to have proximately caused the injury. In McNeill v. Maryland Insurance Guaranty Association, the Maryland Court of Special appeals reiterated this notion. There, McNeill was injured when the battery of the car he was standing next to exploded. In determining that the incident arise out of the ownership, maintenance or use of the motor vehicle, the court stated that “ownership, maintenance or use clauses do not limit recovery solely to injuries that are caused by direct physical contact with the insured vehicle; nor is it necessary that the damages be directly sustained or inflicted by the operation of the motor vehicle.” As McNeill demonstrated, the “arising out of the ownership, maintenance or use” provision is broad. Under certain circumstances, it may include intentional torts. Clearly, when an insured is assaulted, and the motor vehicle acts as the instrument of the assault, the insured’s injuries arise out of the ownership, maintenance or use of a motor vehicle.

However, a non-vehicular assault requires that the insured demonstrate a close connection between the vehicle and the intentional tort. This requirement was demonstrated in Harris v. Nationwide Mutual Insurance Co. There, Harris was injured when a man in a car attempted to steal her purse. The purse thief drove his or her car next to Harris, grabbed her purse and sped off. Harris’s arm, however, became entangled in the purse’s strap and she was dragged to the ground as the purse thief’s car accelerated away. Since the purse thief was never caught or identified, Harris made an uninsured motorist claim against Nationwide, which denied coverage.

After deciding that “Harris’s injuries did not arise out of the ownership or maintenance of the purse’s thief’s vehicle, the court held that Harris’s injuries were directly related to the use of the ”uninsured motor vehicle.” In contrast to the purse snatching in Harris, there are a variety of assaults that incidentally or tangentially involve motor vehicles. The most notable include drive-by shootings, fights following collisions, and car-jackings. In these situations, “the injuries generally do not arise out of the ownership, maintenance or use of the “uninsured motor vehicle.” The general view is that the “uninsured motor vehicle” must be intrinsically involved in the intentional act in order for the injuries to arise out of the ownership, maintenance of use of an “uninsured motor vehicle.” Incidental involvement is insufficient. Whether the “uninsured motor vehicle” is intrinsically or incidentally involved must be determined on a case-by-case basis.”

Exceptions To Requirement that all vehicles have Uninsured Motorist Coverage

  1. State-owned vehicles: The State of Maryland does not have to maintain UM insurance on its vehicles.
  2. Vehicles owned by political subdivisions: Baltimore City is exempt from the requirement of UM coverage. The general rule is “that neither the State nor its subdivisions are included in legislation imposing obligations to provide UM coverage”
  3. Buses: UM coverage is not mandatory.
  4. Taxicabs: The owners of taxicabs are not required to maintain UM coverage on those vehicles.
  5. Off-road vehicles: UM coverage is not required for certain vehicles not registered for use on a highway or vehicles exempt from registration.
  6. A vehicle furnished or available for the regular use of the named insured or the named insured’s resident spouse or relatives. The Maryland UM Endorsement also excludes from its definition of “uninsured motor vehicle” a vehicle which furnished or made available for the regular use of the named insured or the named insured’s resident spouse or relatives. In Young v. Allstate Ins. Co., the court of special appeals ruled that such a regular use exclusion as it applied to a clause 1 insured was invalid and unenforceable.
  7. A vehicle owned by the named insured or named insured’s resident spouse or relatives. One of the exceptions to the definition of ”uninsured motor vehicle” contained in the Maryland UM Endorsement is where the putative ”uninsured motor vehicle” is owned by the named insured or the named insured’s resident spouse or relatives. The court of special appeals has enforced this exception, based on the “owned-but-uninsured” exclusion allowed by the UM statute, which.
  8. A vehicle owned by any governmental unit or agency. The court of appeals has invalidated this exception.
  9. A vehicle owned by a self-insurer. Another exception to the definition of ”uninsured motor vehicle” contained in the Maryland UM Endorsement is a vehicle that is ”owned or operated by a self-insurer under any applicable motor vehicle law.

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