Car insurance in Maryland

What Maryland law requires on every registered car

Maryland is an at-fault state with a compulsory-insurance system: you need coverage in place to get tags from the MVA, and you have to keep it for as long as the vehicle is registered.

Every private passenger policy must include at least:

Two points people miss. First, UM and UIM are not optional extras here — Maryland folds underinsured drivers into the same coverage, so if a hit-and-run driver or an uninsured driver hurts you, your own policy responds. Your UM/UIM limits automatically match whatever liability limits you buy unless you sign a written waiver cutting them back to the state minimum. Second, if you waive PIP for yourself, the coverage still protects other people on the policy, such as passengers — so a waiver is narrower than most drivers assume.

For scale: the NAIC put the 2023 average Maryland premium for liability, collision and comprehensive combined at $1,602 per insured car. Treat that as a yardstick, not a quote — your own number depends on your car, your record, where you park it and the limits you choose.

Source: Maryland Insurance Administration, A Consumer Guide to Auto Insurance.

Fault, claims and how the money actually moves

Maryland assigns financial responsibility to the driver who caused the crash. In practice a claim usually runs on three tracks at once:

• The at-fault driver's liability coverage pays the other party's injuries and property damage — but only up to that driver's limits. If their limits are thin and your loss is large, the gap is yours to chase.
• Your own first-party coverages pay regardless of fault. Collision repairs or pays out on your car; comprehensive handles theft, flood, vandalism, glass breakage outside a collision and animal strikes; PIP reimburses reasonable and necessary medical bills and lost wages quickly, without waiting for a fault decision.
• Your UM/UIM coverage steps in when the other driver has nothing, cannot be identified, or does not have enough.

A few mechanics worth knowing. If your car is declared a total loss, that generally means repair costs are expected to exceed 75% of the vehicle's value, and the insurer owes actual cash value — which can be less than your loan balance unless you carry gap or replacement-cost protection. When two insurers argue over who pays for vehicle damage, Maryland law pushes them into an inter-company arbitration process for physical damage subrogation; that decision binds the insurers on property damage only, not on injury claims. Whether you can claim diminished value (the resale hit a repaired car carries) depends on which policy you are claiming under and its wording.

Maryland also prohibits insurers from settling claims in an arbitrary and capricious way. If an insurer fails to act in good faith, there is a statutory route to extra damages, including litigation costs and interest, and the process begins with a filing at the MIA. (MIA consumer guide)

The enhanced underinsured motorist change (since 1 July 2024)

This is the biggest recent shift for Maryland drivers, and it is easy to sign away by accident.

Under standard UIM, your coverage and the at-fault driver's coverage cannot be stacked. If you carry only minimum limits and the at-fault driver also carries minimum limits, your UIM adds nothing — the at-fault policy has already exhausted the same amount.

Under enhanced UIM (EUIM), the two amounts are added together, so your policy pays on top of the at-fault driver's payout rather than after subtracting it. Maryland also gives a surviving relative of an insured who dies in such a crash the right to recover under EUIM. By law, EUIM limits equal your policy's liability limits.

Since 1 July 2024, EUIM is the default on newly issued auto policies. You get it automatically unless you sign a form declining it — and any change to your uninsured/underinsured coverage has to be made in writing (paper or e-signature), never by a phone call. The default did not flip existing policies over automatically; if your policy predates that date, you can ask your insurer or producer to add EUIM. Adding it generally raises the premium.

Source: MIA, Understanding Enhanced Underinsured Motorist Coverage.

Optional cover that is usually worth the money

Beyond the mandatory package, these are the add-ons Maryland's regulator describes and that most drivers should at least price out:

• Higher liability limits. The 30/60/15 floor is low against a modern hospital bill or a new SUV. Raising liability also raises your UM/UIM in step, so one decision buys protection in both directions.
• Collision and comprehensive. Not required by law, but a lender will require them if the car is financed. Choosing a higher deductible lowers the premium; just keep the deductible to a sum you could actually produce in a week.
• Gap or replacement-cost coverage. Because a total-loss payout is based on the car's value, not your loan, gap coverage closes the hole when you owe more than the car is worth.
• More PIP than the required amount. PIP pays fast and without an argument about fault, which matters while a liability claim grinds on.
• Rental reimbursement / transportation expense. Typically pays a set daily rate for a capped number of days while your car is repaired.
• Towing and labour, and medical payments where offered.

Shop these as a package rather than line by line, and re-shop when your car, your address or your household drivers change. (MIA consumer guide)

Rules Maryland drivers trip on

Never let coverage lapse — even for a day. Maryland tracks insurance electronically through the MVA. A gap can trigger escalating daily penalty fees, suspension of your registration, confiscation of your plates by a tag recovery agent, a restoration fee, and a block on registering any other vehicle until the violation is cleared. Handing over false evidence of insurance carries a fine and possible jail time. Challenges go to the MVA, not the insurer.

Credit can be used, but only in narrow ways. For private passenger auto, an insurer may use credit history only to rate a new policy. It may not refuse to insure you, cancel, non-renew or raise a renewal premium because of credit, and may not force a particular payment plan based on credit. It cannot use any credit factor older than five years, nor penalise you for having no credit history or for the number of credit inquiries. It must tell you credit is being used and, on request, break out that part of the quote. If credit hurt your initial rate, the insurer must re-check it every two years — or sooner at your request — and lower the premium if your credit improved. (Md. Code, Insurance § 27-501)

New policies get a 45-day look. An insurer may use a 45-day underwriting period on a new policy and cancel within it on 15 days' notice if you do not meet its guidelines. Answer the application questions carefully and completely.

Watch the 45-day renewal notice. A premium increase requires at least 45 days' advance notice. If the increase is driven by one driver's record, the notice must offer you the option of excluding that driver — your other choices are to pay it or protest to the MIA.

'Not-at-fault' claims still count. Three or more not-at-fault claims in a three-year window can support cancellation or non-renewal; comprehensive and UM/UIM claims fall in that bucket.

Being turned down is not the end. Maryland Auto Insurance (formerly MAIF) exists for drivers who cannot find coverage in the voluntary market, and insurers are forbidden from refusing to underwrite you solely because you were previously insured there.

How to complain to the Maryland Insurance Administration

The Maryland Insurance Administration (MIA) is the independent state agency that licenses insurers and producers, reviews rates and policy forms, and investigates consumer complaints. It is free to use and you do not need a lawyer.

When to go to the MIA: a claim denied, underpaid or dragged out; a policy terminated improperly; a premium raised without proper notice; misleading statements when a policy was sold or a claim handled; or overcharging, including premium finance charges.

How it works

1. First, put your complaint to the insurer in writing and keep copies of everything — policy, declarations page, estimates, letters, claim numbers.
2. For an auto or homeowners claim problem, ask about the MIA's Rapid Response Program, an informal route that tries to resolve claim disputes without a formal written complaint (410-468-2340, or 800-492-6116 ext. 2340). Taking part is voluntary and does not give up your right to file formally.
3. Otherwise file a formal complaint with supporting documents. A trained investigator is assigned, contacts the insurer, keeps you updated, and the file stays open until the MIA reaches a determination.
4. For a cancellation or non-renewal, timing matters: if you ask the Insurance Commissioner to review the decision before the termination date and the Commissioner begins acting, the policy stays in force until a finding is issued.

Contact: Maryland Insurance Administration, 800-492-6116 (TTY 800-735-2258), insurance.maryland.gov. Sources: MIA consumer guide and Md. Code, Insurance § 27-501.