It is important to be aware of changes in Maryland motor vehicle insurance laws that may affect your coverage with your automobile insurer. A January 31, 2018 Maryland car accident case before the Court of Special Appeals of Maryland illustrates the difficulties that may arise if coverage expectations are not met.
In the case, the plaintiff brought suit against her own insurance company for uninsured motorist (UM) benefits after she was involved in a car accident with an uninsured driver and suffered injuries. The insurance company denied her claim, arguing that her UM coverage was limited to $75,000, despite a $300,000 liability limit on her policy.
Under Maryland’s motor vehicle insurance laws, unless waived, the amount of UM coverage provided under a car insurance policy must equal the amount of liability coverage provided under the policy. The statute requiring equal coverage was effective only for motor vehicle insurance policies issued or delivered on or after October 1, 1992. To waive equality coverage, the first named insured must sign a statement in writing to that effect.
The plaintiff in the case was covered under a policy currently held by her mother, which had been renewed every November since the policy was issued in 1987. It was undisputed that neither the plaintiff’s mother, nor any prior policyholder, ever executed a written waiver of UM coverage equality. However, the insurance company argued that the statute did not apply to the plaintiff’s policy because it was not issued after 1992, since it had been continuously renewed since 1987, and therefore, a waiver of enhanced UM coverage limits was not required.
On appeal, the court agreed that under Maryland law, a routine renewal policy is not a policy “issued or delivered” within the meaning of the statute, since the resulting policy is considered a continuation of the existing policy. As a result, the question for the court was whether there could be circumstances in which a renewal policy that is issued or delivered has changed so much from the policy as originally sold that it is, in effect, a new policy. In considering the issue, the court construed the meaning of the terms “issued or delivered” in light of the public policy underlying UM coverage, which serves to afford greater protection, through the private sector, to those injured by uninsured motorists.
The court concluded that there could, in fact, be changes to a policy that materially alter the level of risk or introduce new policy decision-makers, which thus remove the policy from being a mere continuation of coverage. Accordingly, the court held that a policy is covered under the statute if it is either a policy of a new business or an existing policy that through renewals has materially changed to meaningfully alter the risk relationship between the insurer and the insured. The appeals court explained that the inquiry into whether an existing policy has materially changed depends on the facts of each case, and in some cases, it may need to be decided by a jury.
In reviewing the facts of the case, the court found that there were a multitude of significant changes to the policy at issue since it was established in 1987. The court pointed to the change in the number of vehicles covered in the policy, the people named as policyholders, some of whom had died, and the meaningful changes in the risks covered. These changes triggered the application of the statute mandating equal UM and policy limits without a waiver. Since no waiver was signed, the court held that the insurer must provide the plaintiff with UM coverage equal to the $30,000 liability limits.
At Foran & Foran, P.A., our Maryland personal injury attorneys can provide legal guidance if you have been hurt in a car accident or another incident caused by negligence. To discuss your case with one of our experienced lawyers, call (301) 441-2022 or contact us online.
More Blog Posts:
Maryland Court Rules in Favor of Insurance Company in Car Accident Settlement Case<, Maryland Personal Injury Blog, published July 30, 2015
Maryland Court of Appeals Upholds “Gap” Insurance Policy in Pedestrian Accident Case, Maryland Personal Injury Blog, published October 31, 2015