March 23rd, 2023
Enhanced Underinsured Motorist Insurance in Maryland and Why You Want It
Author: Jonathan F. Lieberman
Do you know that if you are involved in an accident through no fault of your own the other driver may not be carrying enough insurance to cover your car or your injuries? In fact according to a report by the Insurance Research Council, approximately 13% of drivers in the United States have no liability insurance coverage at all.
This is where Underinsured Motorist (UIM) Coverage comes in. UIM is coverage in an insurance policy that provides protection for individuals involved in accidents caused by drivers who are underinsured. In such cases, if an underinsured driver is at fault for an accident and does not have enough insurance coverage to pay for the damages, the underinsured motorist coverage will pay the difference between the amount of damages and the amount of coverage in the at-fault driver’s policy.
In 2018, Maryland motor vehicle insurance law changed the way Underinsured Motorist (UIM) Coverage can be purchased and paid out on your policy that benefits you! Prior to the change in the law, in an auto accident, a Maryland policyholder could recover the amount of UIM coverage on their policy minus the liability insurance coverage of the driver who caused a collision. For example, if the driver who caused an accident had $30,000 in liability insurance coverage (the legal minimal limit in Maryland) and you had $100,000 in UIM coverage, you were legally allowed to collect the maximum of the at fault driver’s policy of $30,000 and an additional $70,000 from your own policy, totaling $100,000.
Now, under the new law, motorists can purchase a policy containing Enhanced Underinsured Motorist (EUIM) Coverage at the same time they purchase their auto insurance. This minimal additional cost allows a policyholder to collect the maximum limit of the at fault driver’s liability insurance PLUS the full amount of your UIM coverage. So in our example above, an injured motorist can collect a maximum of $30,000 plus the full $100,000 of their underinsured motorist coverage for a total recovery of $130,000 .
There are a few things, however, that policyholders should be aware of concerning this additional coverage. First, EUIM coverage is only required to be offered by an insurance carrier at the time of the purchase of the policy. So, a carrier is not obligated to offer it on any renewals – if you do not have it now you need to ask for it. Second, in order to purchase this coverage, you must sign a form to opt into EUIM coverage. This means that you are not automatically provided with this coverage, you must direct your carrier to add it to your policy. This is an extra step, but one that is well worth it. There are currently efforts being made by groups to lobby the Maryland legislature to change the law to being one where a policyholder is automatically provided this coverage and must opt out of it, rather than opt in. For now, every policyholder should opt into EUIM coverage since it provides much needed additional insurance if/when you need it.
If you or anyone you know is or needs to make an EUIM claim or would like a review of your current policy, you should consult with one of our personal injury attorneys.