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Maryland House Approves Car Insurance Increase

On Tuesday, March 23, the Maryland House of Delegates voted to approve an increase in state standards regarding minimum auto insurance requirements. The House members voted 97 to 36 in favor of passing the bill, which now goes to the state Senate for consideration and debate. The bill is intended to bring liability insurance requirements in line with increased average collision claim costs, and also to bring more funding to state coffers from increased auto premium taxes drivers carrying minimum policies would pay if the measure were to become law.

Specifics of Maryland Insurance Bill

Every driver in the state of Maryland is required to carry auto liability insurance according to state law. This bill approved by the MD House of Delegates would increase existing liability insurance requirements for bodily injury. Currently, drivers in the state must have at least $20,000 in bodily damage liability protection for single victim at fault injury accidents, and $40,000 in protection for multiple injury at fault crashes. Under the terms of the bill that now awaits Senate action, those minimums would increase to $30,000 and $60,000, respectively. Proponents of the measure in the House of Delegates point out the opportunity for increased tax revenues that could be gained by passage of the bill into law. Another benefit would be for drivers who would better protected under the proposed terms of the bill.

Maryland uses a split form liability insurance which divides the policy into three sections. The first two are the bodily injury provisions, and the third is a separate portion dedicated to paying out for property damages caused by covered drivers in at fault accidents. The portion dedicated to property damage liability remains unchanged in the terms of the House bill. That minimum in Maryland currently sits at $15,000. Drivers in the state of Maryland are also compelled to include uninsured and underinsured motorist coverage on their auto insurance policies [2].

MD Uninsured and Underinsured Coverage

Uninsured and underinsured motorist coverage is intended to protect covered Maryland drivers in instances where they get into accidents with drivers who either carry no insurance at all, or insufficient coverage to handle all the expenses associated with the accident. They are used in situations where the other driver is liable, and they pay for your medical expenses up to the limits of the policy. They are secondary in nature, meaning they only apply when the other driver's limits of coverage are exhausted. As an example, if the negligent driver has $20,000 in liability bodily injury insurance and a grand jury awards $100,000 in compensation for your injuries and pain and suffering, your own insurance provider is responsible for the remaining $80,000 in payments.

Uninsured and underinsured benefits on an auto insurance policy seem counterintuitive because they essentially force insured drivers to take responsibility for the things uninsured and uninsured motorists should take care of. But they must be regarded as a much preferable way to protect you in these circumstances than by trying to deal with these costs out of pocket. Uninsured coverage also applies in hit and run accidents, so if you are victimized in one of these cases, you will be glad you have this insurance.

Optional Coverage Available in Maryland

Liability and uninsured/underinsured make up a fine base of protection for state motorists. But they do not address all possible circumstances, nor do they represent the only options drivers have in the state to protect them from different threats on the road. First of all, it must be noted that state minimums for insurance are only minimums; and motorists can and do often choose to carry more than just the minimum for both of these areas of protection. And second, there are other available parts to a policy that can serve to round out your coverage and enhance your protection in different ways.

Collision and comprehensive insurance immediately come to mind. These parts of an auto policy provide monetary compensation for losses to your vehicle. Damage, destruction and loss of use are all covered. Collision insurance pays out for crash related losses, while comprehensive is set aside for non collision related claims like theft or hail damage that occurs while a car is parked outside your home. Medical payments coverage can also be added, giving you protection for situations when you or other covered passengers get injured in accidents and require medical treatment as a result.

There are many optional endorsements available on a policy beyond just the very minimum required by Maryland state law. The auto insurance bill passed by the House of Delegates seems to point toward fuller coverage for drivers, but the truth is that it really only affect those who carry the minimum levels of protection.

[1] http://www.insurancejournal.com/news/east/2010/03/25/108472.htm Retrieved 2010-03-28.
[2] http://www.edmunds.com/advice/insurance/articles/43773/article.html Retrieved 2010-03-28.

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