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Maryland Requires Enhanced Underinsured Motorist Coverage for New Auto Insurance Policies

August 15, 2018

Maryland auto insurers issuing new policies are now required to offer enhanced underinsured motorist (EUIM) coverage in place of the uninsured motorist (UM) coverage required under Maryland Insurance Code § 19-501.1(d). EUIM coverage provides the same benefits as UM coverage but, in the event of a claim, the EUIM coverage limit is not reduced by the amount of any available coverage from the at-fault party’s insurer. Drivers who elect EUIM coverage will be able to stack their EUIM payment on top of anything they receive from a responsible third-party’s liability policy without any offset.

For example, if a plaintiff who has $100,000 in UM coverage is in a car accident with a defendant carrying only the state limits of $30,000 in coverage, the maximum recovery for the plaintiff would have been $100,000: $30,000 from the defendant and $70,000 from her UM coverage. Under the new law, if the plaintiff elects EUIM coverage, the maximum recovery for the plaintiff will now be $130,000. The repercussions for the insurance industry are obvious as insurers will no longer receive an offset on their insureds’ benefits.

Insurers should note that the mandatory offer of EUIM must be made in writing via an official form written by the Maryland Insurance Administration (MIA). The MIA form required to be used can be found here.

For more information about how the EUIM requirement might affect your business, please contact: