Enhanced Underinsured Motorist Coverage Now Offered in Maryland
Beginning July 1, 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 § 19-509. Md. Code Ins. § 19-501.1(d). Unlike UM coverage, EUIM coverage prohibits the carrier from reducing the coverage amount by any applicable liability insurance paid on behalf of a liable third party. Md. Code Ins. § 19-501.1(h)(2). Essentially, claimants 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, suppose a driver is hit by a liable third party. The third party has a $50,000 policy limit, and the driver has underinsured motorist (“UIM”) coverage of $200,000. Under previous statutes, the driver could recover $50,000 from the third party and then up to $150,000 from his own carrier ($200,000 – $50,000) for UM benefits. Under the new EUIM statute, however, the driver could recover $50,000 from the third party as well as the full $200,000 from his own carrier for a total of $250,000 — depending, of course, on damages.
EUIM coverage will not be automatic, and must be elected to in writing by the insured. Md. Code Ins. § 19-501.1(c). Additionally, carriers must offer EUIM coverage to any renewal or extension of coverage of a policy beginning October 1, 2017. Id. If the insured does not elect to obtain EUIM coverage, the insurer must still offer the previously required regular UIM coverage.