Articles Posted in Insurance Issues

In Maryland, all motorists are required to maintain auto insurance. The purpose of requiring motorists to obtain car insurance is to ensure that, in the event of an accident, accident victims have an avenue of recovery to help them recover the costs associated with the accident.

An insurance contract is like any other contract. The insured pays a monthly premium and in exchange, the insurance company provides insurance. An insurance contract is a lengthy legal document, and the details of an insurance policy are typically complex. Among the many issues covered by an insurance contract, the document will explain the situations in which insurance coverage applies, the process by which the insured must file a claim, as well as the obligations of the insurance company to investigate the claim.

Recently, a state appellate court issued an opinion discussing an insurance company’s obligation to settle a meritorious claim that is within a policy’s limits. Ultimately, the court concluded that although an insurance company does have a duty to settle a claim that is within the policy limits, this duty is only triggered by the insured making an offer to settle. If you have questions about insurance pay-outs after an accident, reach out to a dedicated Maryland car accident attorney without delay.

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Insurance companies want to minimize the amount they pay out in the event of a claim, and unfortunately, do not always compensate Maryland car accident victims according to what they deserve. If an insurer fails to fairly settle a claim, the insured may be able to pursue a claim of bad faith against the insurer. In a recent case before a state appeals court, the state found the plaintiff could pursue a claim of bad faith against GEICO after it failed to timely pay her insurance claim.

The Facts

According to the court’s opinion, the plaintiff was in a car accident and suffered serious injuries. Another driver caused the car crash, and both she and the other driver were insured by GEICO. The plaintiff made a claim under the driver’s insurance coverage, as well as under her own insurance plan for underinsured motorist (UM) benefits.

After the plaintiff did not receive payment on the claims, she sued the driver and GEICO. GEICO then paid the plaintiff the maximum benefits under the at-fault driver’s policy, but refused to pay the plaintiff benefits under her UM policy. The plaintiff then filed a civil remedy notice (CRN) with the Department of Financial Services, and mailed GEICO a copy. GEICO subsequently agreed to pay the plaintiff her full UM benefits, but the plaintiff’s lawyer did not receive the check and release until almost three weeks later. This was 65 days after the CRN was filed with the Department of Financial Services.

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In the wake of a serious Maryland car accident, accident victims face many difficulties. Of course, these include overcoming the physical and emotional injuries that come along with being involved in a serious accident. However, even after an accident victim has physically recovered as best they can, before they can obtain compensation for their injuries they will likely have to deal with one or more insurance companies.

While Maryland car insurance is required by law and, in theory, operates to the benefit of Maryland accident victims. In reality, insurance companies are for-profit corporations that are motivated by their bottom line. To remain profitable, insurance companies must make more in monthly premiums than they pay out in claims. Thus, insurance companies routinely dispute motorists’ claims or attempt to settle them for as little as possible. A recent opinion issued by a state appellate court illustrates the difficulties a motorist had when trying to file a claim under an underinsured motorist (UIM) insurance policy.

The Facts of the Case

According to the court’s opinion, the plaintiff was seriously injured in a motorcycle accident that was allegedly caused by another driver. The at-fault driver had insufficient insurance coverage to adequately compensate the plaintiff for the injuries he sustained in the accident. The also plaintiff had two insurance policies, one with Allstate as well as a UIM policy with the defendant insurance company.

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Last week, we discussed a new Maryland law that required insurance companies to offer Enhanced Underinsured Motorist (EUIM) protection with all new individual insurance policies issued after July 1, 2018. Under the new EUIM framework, an accident victim is able to obtain the full value of their insurance policy without an offset for any compensation provided by the at-fault party’s policy.

This new law represents one form of insurance stacking. Insurance stacking is a term used to describe an accident victim’s ability to recover under multiple insurance policies based on a single accident. Some types of insurance stacking are permitted. For example, under the new EUIM law. However, other accident victims may be prevented from stacking in other situations.

Multiple-Policy Stacking

In the event that an accident victim’s damages are greater than the limit under their insurance policy, the accident victim may be required to cover some of their expenses out-of-pocket. However, if an accident victim is covered under multiple insurance policies, they may wish to file a claim and recover under each policy. Thus, by adding the recovery amounts between multiple policies, an accident victim is able to recover a greater amount.

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Maryland law requires that all motorists obtain a base level of car insurance in order to legally drive on the state’s public roads. Since 2011, Maryland drivers have been required to obtain underinsured or uninsured motorist (UIM) protection. This type of insurance compensates a motorist when an at-fault driver either has no insurance or does not have sufficient insurance to cover the injuries of a Maryland car accident victim.

Recently, Maryland legislature passed a new law requiring insurance companies to offer a new version of UIM insurance. Under the old UIM insurance policies, a motorist’s total recovery would be reduced by whatever insurance the at-fault driver had. For example, suppose a motorist was involved in a collision caused by another driver who had an insurance policy with a policy maximum of $50,000. If the injury victim’s policy max was $200,000, the injured motorist would only be able to obtain $150,000 from their own insurance company despite the fact that their policy limit is $200,000. This is because the old UIM statute counted the compensation from the at-fault party’s insurance policy toward the policy maximum of the injured motorist.

Under the new Enhanced Underinsured Motorist Coverage (EUIM), Maryland motorists will enjoy greater protection. Simply, an EUIM policy will not count the compensation received from an at-fault driver’s insurance company toward the policy maximum of the injured party. So, in the above example, the injured motorist would be able to recover a maximum of $50,000 from the at-fault motorist’s insurance company, and another $200,000 from their own insurance company.

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In some Maryland car accident cases, where the case is filed and litigated may be one of the first disputed issues that must be resolved by the court. For example, most Maryland accident victims would prefer to file their cases in a convenient venue, making trips to court less burdensome. In some cases, certain other considerations may also come into play, such as the local court rules or customs.

In a recent state court appellate opinion, the court discussed whether the defendant’s request to transfer the plaintiff’s case to a venue more convenient to him was properly denied by the lower court.

The Facts of the Case

The plaintiffs were injured in a car accident when the defendant rear-ended them. Evidently, a vehicle swerved into the plaintiff’s lane, requiring the plaintiff-driver to quickly apply the brakes. The defendant, who was traveling directly behind the plaintiffs’ vehicle at the time, failed to stop in time and ran into the back of the plaintiff’s car. The driver that swerved in front of the plaintiff’s car sped away and was never located.

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Recently, a state appellate court issued an opinion in a personal injury case discussing an important issue that frequently arises in Maryland car accident cases. The case presented the court with the opportunity to discuss whether an employee who caused an accident injuring the plaintiff was a “permissive user” under his employer’s insurance policy. Finding that the employee was a permissive user, the insurance company will be required to satisfy the judgment against the employee.

The Facts of the Case

The plaintiff was injured in a car accident that occurred when the defendant rear-ended his vehicle while he was stopped at a red light. The defendant later admitted to having had a few drinks and being intoxicated. As it turns out, the defendant, who worked for a railroad company, was not from the area, and was there on business. The vehicle that the defendant was driving at the time of the accident was a company car.

The plaintiff filed a personal injury lawsuit against the defendant, which resulted in a nearly $1.5 million verdict. However, after 30 days of not receiving payment, the plaintiff filed this case against the insurance company that wrote the policy for the railroad company that employed the defendant. The plaintiff argued that the defendant was covered under that policy and, therefore, the insurance company was on the hook for the $1.5 million verdict.

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Recently, a state appellate court issued an interesting opinion in a personal injury case raising an important issue that frequently arises in Maryland car accident cases. Specifically, the case considered whether motorists were covered under a third party’s uninsured/underinsured motorist (UIM) coverage. Finding that the third party specifically rejected obtaining coverage for those other than the named individuals in the policy, the court rejected the plaintiffs’ claims.The Facts of the Case

The plaintiffs arranged to test-drive a car from a local car dealership. While they were out on the test-drive, another motorist rear-ended the plaintiffs. The plaintiffs were injured as a result of the collision and filed a personal injury lawsuit against the driver who hit them.

That driver, however, did not have sufficient insurance coverage to fully compensate the plaintiffs for the injuries they sustained in the accident. Therefore, the plaintiffs then named the insurance company that wrote the policy for the car dealership as a party to the case, seeking to obtain coverage under that policy’s UIM coverage.

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Recently, a state appellate court issued a written opinion in a personal injury case requiring the court to interpret an insurance policy to determine if the policy provided uninsured motorist (UIM) protection to a man who was killed by an uninsured driver. Ultimately, the court concluded that the decedent’s employer’s insurance policy did not provide UIM coverage to the decedent and, thus, rejected the plaintiff’s claim.

The Facts of the Case

The plaintiff in this case was the estate of a man who was killed when he was struck by a driver who was high on methamphetamine while he was riding his personal lawnmower. The at-fault driver was not insured.

The estate of the decedent filed a UIM claim under the decedent’s employer’s insurance policy, which contained coverage for UIM benefits. Specifically, that clause stated that UIM benefits under the policy extended to “you or others we protect.” The estate argued that the term “others we protect” included the decedent.

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It may seem obvious, but a Maryland or Virginia car accident can cause serious, life-altering injuries to those involved. In most cases, the at-fault party will have liability insurance that will kick in to compensate the accident victims for the injuries they sustained in the accident. However, once the at-fault driver’s liability policy maximum is met, the accident victims will only be able to rely on whatever personal assets the at-fault party has. This may still leave accident victims without full compensation for serious injuries.

Every insurance policy that is issued in Maryland is required to provide un/underinsured motorist (UIM) protection to the insured. In the event of a serious Maryland car accident where the at-fault party’s liability coverage is insufficient to cover the costs of an accident victim’s injuries, the accident victim’s UIM policy will kick in, covering the remaining uncovered portion.

In Maryland, all motorists are required to obtain the following liability and UIM coverage amounts:

  • $30,000 to cover bodily injury to one person;
  • $60,000 to cover bodily injury to two people; and
  • $15,000 to cover damage to property.

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