Bill Summary – FastDemocracy

HB 144
                      Department of Legislative Services
                             Maryland General Assembly
                                   2020 Session
                           FISCAL AND POLICY NOTE
                                 Third Reader
House Bill 144                  (Chair, Economic Matters Committee)(By Request -
                                Departmental - Maryland Insurance Administration)
Economic Matters                                                               Finance
  Insurance - Uninsured or Enhanced Underinsured Motorist Coverage - Property
                                    Damage
This departmental bill clarifies that uninsured motorist (UM) coverage or enhanced
underinsured motorist (EUIM) coverage in a motor vehicle insurance policy must
(1) entitle the insured to recover from the owner or operator of an uninsured motor vehicle
because of property damage (including the loss of use of the insured vehicle) and (2) at
least equal the minimum security required for all motor vehicles for bodily injury and
property damage (including the loss of use of the insured vehicle).
                                    Fiscal Summary
State Effect: The bill does not materially affect State finances and operations.
Maryland Automobile Insurance Fund Effect: None.
Local Effect: None.
Small Business Effect: The Maryland Insurance Administration (MIA) has determined
that this bill has minimal or no impact on small business (attached). The Department of
Legislative Services concurs with this assessment.
                                        Analysis
Current Law/Background: Maryland law requires an owner of a motor vehicle that is
required to be registered in the State to maintain insurance for the vehicle during the
registration period. The security required must provide at least the payment of claims:
      for bodily injury or death arising from an accident of up to $30,000 for any
       one person and up to $60,000 for any two or more persons;
      for property of others damaged or destroyed in an accident of up to $15,000;
      unless waived or exempt under Chapters 425 and 426 of 2016, for personal injury
       protection coverage of $2,500 per person; and
      for UM or EUIM coverage under Chapters 20 and 815 of 2017 (unless waived, the
       amount equals the amount of liability coverage provided under the policy; if waived,
       the amount equals the minimum required insurance for liability coverage).
Regarding UM or EUIM coverage, State law explicitly requires the coverage to entitle the
insured or the insured’s surviving relatives to recover from the owner or operator of an
uninsured/underinsured motor vehicle in the event of bodily injury (or death).
Background: UM and EUIM coverage pay for injury and damages caused by an
uninsured or hit-and-run driver. The coverage reimburses the policyholder, members of the
policyholder’s family, or a designated driver for an accident caused by the uninsured
motorist. The coverage generally pays for repairs to property as well as medical expenses,
lost wages, and pain and suffering.
A recently issued circuit court ruling interpreted § 19-509 of the Insurance Article as not
requiring UM and EUIM coverage to pay for the loss of use of the insured’s vehicle (which
typically means reimbursement for a rental car). MIA advises this is a departure from how
it and almost every private passenger automobile insurer interprets that provision. Thus,
the bill clarifies that such coverage must pay for the loss of use of the insured’s vehicle.
                                Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Insurance Administration; Maryland Automobile
Insurance Fund; Department of Legislative Services
Fiscal Note History:      First Reader - January 28, 2020
an/jc                     Third Reader - February 6, 2020
Analysis by: Richard L. Duncan                         Direct Inquiries to:
                                                       (410) 946-5510
HB 144/ Page 2
                                                          (301) 970-5510
             ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Insurance - Uninsured or Enhanced Underinsured Motorist Coverage
- Property Damage
BILL NUMBER:          HB 144
PREPARED BY:
(Dept./Agency)        Maryland Insurance Administration
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
         X       WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND
                 SMALL BUSINESS
                              OR
                 WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND
                 SMALL BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
None.
HB 144/ Page 3
Statutes affected: 
Text - First - Insurance - Uninsured or Enhanced Underinsured Motorist Coverage - Property Damage: 19-509 Insurance, 27-609 Insurance, 1-975 Insurance, 19-509.1 Insurance, 27-609 Insurance
Text - Third - Insurance - Uninsured or Enhanced Underinsured Motorist Coverage - Property Damage: 19-509 Insurance, 27-609 Insurance, 1-975 Insurance, 19-509.1 Insurance, 27-609 Insurance