The Maryland legislature is currently considering a new law that would force auto insurance companies to offer enhanced uninsured motorist coverage (also known as “stacking” or “stacked” UIM coverage) as the default option for Maryland drivers. The new bill would make this enhanced coverage an opt-out policy feature (similar to PIP) rather than an opt-in feature, which would effectively mean that the majority of insurance policies would have the enhanced coverage.
In this post, we will explain exactly what the new law will do and how it will directly benefit you as a Maryland driver. Please use the follow links for instructions on how you can make your voice heard by telling the Maryland Senate Finance Committee that you fully support this new bill as benefit for Maryland drivers:
- My primary coverage was insufficient
- I lost someone due to a negligent driver
- I support enhanced UIM coverage in Maryland
About “Stacking” or Enhanced Uninsured Motorist Coverage
Stacking or enhanced uninsured motorist insurance (EUIM) is a type of auto insurance coverage in which uninsured motorist coverage (UIM) limits for multiple auto insurance policies can be combined together to increase the maximum amount that the insurance company has to pay for an accident claim. If you do not have EUIM or “stacked” auto insurance, you cannot combine UIM coverage limits across vehicles or policies.
Having EUIM basically means that if you get in a very big accident with another driver that has no insurance (or very little insurance), you can combine your own insurance policies to ensure that there is more insurance coverage to cover your losses. The examples below will help explain how EUIM works in a practical situation.
Jane is driving through an intersection on a green light when Doug runs a red light and slams into the side of Jane’s car. Jane suffers very serious physical injuries that equate to about $400,000 in damages. Doug only has $100,000 in auto insurance coverage, but Jane has $300,000 in UIM coverage.
WITH EUIM: If Jane’s auto insurance has EUIM included, she will get compensation for all $400,000. She will get $100,000 from Doug’s policy, then she can stack her UIM to cover the remaining $300,000 in damages.
NO EUIM: Without EUIM, Jane would not be able to get compensation for all $400,000. She would get $100,000 from Doug’s policy, but without the EUIM stacking Jane would only get $200,000 from her UIM coverage. She would be left with $100,000 in uncovered damages.
EUIM in Maryland
For a long time, EUIM coverage was not even an option for Maryland drivers because state law specifically prohibited the stacking of insurance policies. This meant that when UIM coverage applied, the insurance company could deduct any amount that it’s insured received from the at-fault driver’s coverage.
Maryland’s prior prohibition on EUIM or stacking of coverages was at odds with the modern trend followed by most states. After years of criticism from consumer advocates, the Maryland legislature finally changed this by passing a new law in 2018 that ended the prohibition on stacking. The 2018 law also required all Maryland auto insurers to offer EUIM coverage to insureds as part of their policy.
The problem with the 2018 law was that it allowed auto insurance companies to offer the EUIM as an opt-in or enhanced coverage feature. This meant that the insured had to know about EUIM and specifically request that it be added to their policy. Not surprisingly, nobody knew that EUIM was an option so the 2018 law did basically nothing to increase EUIM coverage among Maryland drivers.
New Law Would Make EUIM a Default Coverage in Maryland Auto Policies
In January 2023, a new bill was introduced in the Maryland legislature that would essentially make EUIM a default coverage feature for Maryland auto insurance policies. The bill is called the Private Passenger Motor Vehicle Liability Insurance – Enhanced Underinsured Motorist Coverage – Opt-Out Option. The bill would basically convert EUIM coverage from an opt-in feature (that nobody really knows about or gets) to an opt-out coverage feature. This is a big deal because if EUIM becomes an opt-out feature it means that the majority of Maryland drivers will end up with EUIM coverage. EUIM will effectively become a standard coverage feature in most Maryland auto policies.
Why Should You Support the New Law?
The new law would be a significant benefit for Maryland drivers who are seriously injured in auto accidents. The new law would help avoid situations (like the example we used above) where an innocent victim is serious injured in an auto accident and left with uncovered medical expenses or damages.
The only argument against the new law is that it would increase the cost of auto insurance in Maryland. Lobbyists for the insurance industry are very quick to point this out. The reality, however, is that the new law would have a minimal impact on the price of Maryland auto insurance premiums. Other states have enacted similar laws and made EUIM a standard coverage feature and it has not resulted in a drastic increase in the cost auto insurance in the state.
In fact, research has shown that median auto insurance premiums are basically the same in states where EUIM is an opt-out or default feature vs. states where EUIM is not available. Specifically, Georgia adopted the same opt-out EUIM coverage law back in 2009 and has not seen any significant increase in auto insurance premiums since then.
Let the State Legislature Know that You Support the EUIM Bill
As things currently stand, the new EUIM opt-out bill is facing significant opposition in the Maryland Senate Finance Committee. We need Maryland voters and drivers to voice their support for this new bill. The Maryland Association for Justice has established the following web forms that you can use to let state lawmakers know that you want them to pass this bill. Use the links below to let them know about your prior experiences or just voice your support for the bill.
My Primary Coverage was Not Enough