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Maryland Senate Approves Auto Insurance Increase

On April 7, 2010, the Maryland state Senate approved a bill calling for an increase in the state's minimum auto liability insurance limits. The measure was passed by a vote of 27-20 after much spirited debate. On the side of passage were those who said the measure was long overdue, since the state had not seen an increase in minimum liability limits in almost four decades; on the other were those who questioned whether the timing was right for such legislation with the state economy still struggling and many drivers only carrying minimum policies.

Republicans Charge Bias Against Poor

Some Republicans who came out against the measure charged that it essentially pitted trial lawyers against poor people in the state of Maryland. Their logic was that these trial lawyers would be the biggest beneficiaries of the legal change because they would be able to go after bigger judgments in civil court in cases where minimum liability coverage was all the defendant had at the time of an at fault auto accident. But others who were in favor of the bill's passage argued that the increase actually benefits low income drivers by giving them liability coverage more reflective of accident costs today.

Only a small percentage of Maryland drivers actually purchase only minimum auto liability policies. A large majority of auto owners in MD buy more than just the minimum, adding to their liability coverage and/or including collision and comprehensive insurance in their policies as well. So for this majority group, rates are unlikely to change. Still, for those who do only purchase minimal policies necessary to get registered, a price increase is imminent once the bill is signed into law by Governor Martin O'Malley.

Who Benefits from MD Insurance Bill

The main beneficiaries of the increased minimum limits passed into law by the Maryland Senate would be the victims of injury auto accidents whose medical expenses exceeded the old Maryland liability limits and who did not carry adequate uninsured or underinsured motorist bodily injury coverage. Trial lawyers also appear to win with the bill passage, but the extent of their prospective gain is debatable depending on who you ask.

The bill calls for an increase in the minimum auto insurance liability coverage limits set by state law. In the state of Maryland, those minimums for bodily injury have been $20,000 for a single victim or $40,000 for multiple victims ever since 1972, the year the legislature last increased these minimums. Many legislators in both the Senate and House of Delegates who came out in favor of the measure felt that this increase was long overdue, saying that the old limits simply did not reflect the ever increasing cost of medical care, especially emergency room care.

The House of Delegates in Maryland had passed their version of the auto insurance liability bill by a much more comfortable vote and without such contentious debate back on March 23. The bill was intended to bring liability insurance minimum requirements more into line with what injury accidents can cost nowadays. And as a corollary benefit, the state of Maryland is expected to reap a windfall in the way of increased tax revenues from taxes on these premiums.

Optional Maryland Auto Insurance Coverage

Liability insurance is required for all motorists. They are also compelled by state law to include uninsured and underinsured motorist coverage. Aside from these areas of protection, there are several optional areas they can also choose from among to beef up their Maryland policies. The first and most obvious option is simply to increase the amount of liability insurance they include on their policies. Many state auto owners do carry more than the minimum, as mentioned previously.

Collision and comprehensive insurance are also available for all MD drivers. Collision coverage protects the covered vehicle against property damage due to any accident circumstances regardless of who was at fault for the accident. Comprehensive handles non accident situations such as theft, vandalism, or storm damage. Both of these are optional as far as the state is concerned, but many drivers are forced to carry them due to the terms of auto finance or lease agreements. Thus hundreds of thousands of drivers include both collision and comprehensive in their Maryland car insurance policies.

There are other optional endorsements that state drivers can add to their policies to increase their value and protect their vehicles and those who drive them. But these are the only areas mandated for drivers in the state. The new bill awaiting approval by the state governor will certainly have an effect on certain drivers' policies but will not directly affect everybody who owns or drives a vehicle in the state of Maryland. After 38 years, most legislators felt it was time to adjust liability insurance minimums.


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