Maryland Car Insurance Laws: Minimum Coverage, Penalties and SR-22

Maryland requires 30/60/15 liability coverage: $30,000 per person and $60,000 per accident for bodily injury, and $15,000 for property damage. Policies must also include uninsured/underinsured motorist coverage in the same minimum amounts ($30,000/$60,000 bodily injury and $15,000 property damage) and $2,500 of personal injury protection (PIP) unless PIP is waived. The Motor Vehicle Administration may accept another form of security (such as self-insurance) if it provides the required benefits.

Maryland uses a fault-based system for liability claims, with an add-on of personal injury protection (PIP). PIP pays at least $2,500 regardless of fault for medical expenses, 85% of lost income, and essential household services within 3 years of an accident. PIP is included unless the first named insured makes an affirmative written waiver on the Commissioner's form after receiving notice of the coverage and its cost. Claims for damages beyond PIP are made against the at-fault driver's liability coverage.

Uninsured motorist coverage (which in Maryland includes underinsured motorist coverage) is required in every auto liability policy, at minimums of $30,000/$60,000 for bodily injury and $15,000 for property damage. When a private passenger policy's liability limits exceed the state minimums, UM coverage must equal the liability limits unless the first named insured signs an affirmative written waiver on the Commissioner's form after being told the nature, benefit and cost of the coverage being waived. Insurers also offer optional enhanced underinsured motorist coverage.

Drivers must carry evidence of insurance in the vehicle (or have it in their possession) and show it when a police officer asks. An insurer-issued insurance ID card is acceptable, and evidence may be shown electronically, including on a cell phone or other portable device. Failing to carry or show it carries a $50 fine, which may be waived. Insurers report coverage to the MVA electronically, take part in its online insurance verification program, and must notify the MVA of lapses and terminations.

Knowingly driving an uninsured vehicle, or letting someone else drive it, is a crime punishable by up to 1 year in jail and/or a fine of up to $1,000 for a first offense, and up to 2 years and/or $1,000 for a second or later offense. Separately, when insurance lapses, the vehicle's registration is suspended, and the MVA may charge an uninsured motorist penalty of $200 for the first 1 to 30 days, then $7 per day starting on day 31, up to $3,500 per violation in a 12-month period. The penalty is not charged in certain cases where the plates are returned within 10 days. Plates must be surrendered within 48 hours of notice of suspension, or the owner's driver's license may be suspended.

According to the Maryland Insurance Administration, an insurer must give at least 45 days' notice before canceling or nonrenewing an auto policy for any reason other than nonpayment of premium, and at least 10 days' notice before canceling for nonpayment (even one day late). The insurer must be able to prove it mailed the notice to the named insured's last known address (or sent it electronically if the insured agreed to electronic notices). Insurers must give a clear, specific statement of the actual reason for a cancellation or nonrenewal of personal insurance; general terms like "violation or accident record" are not enough. An insurer may cancel or nonrenew if the insured filed three or more "not-at-fault" claims within three years.

Maryland limits the use of credit history in auto insurance. An insurer may not refuse to insure, refuse to renew, cancel, or increase a renewal premium based in whole or in part on credit history. It may use credit history only to rate a new policy, may consider only credit factors from the previous five years, may not apply a surcharge of more than 40% based on credit, and may not rate on the absence of credit history or the number of credit inquiries. Insureds may ask the insurer to recheck their credit once per policy period. The MIA lists age, gender, marital status, mileage, driving record, credit history, vehicle use and type, and garaging location as common rating criteria.

A vehicle is "salvage" if collision, fire, flood or other damage makes the cost to repair it for highway use exceed 75% of its fair market value before the damage, or if an insurer acquires it in a claim settlement. An insurer that acquires a vehicle through a claim settlement must apply for a salvage certificate within 10 days after settlement. An owner may choose to keep the damaged vehicle and receive a salvage title.

In a private sale, the seller completes all required sections of the Maryland title, including the sale price and odometer reading, and signs and dates it; a bill of sale is not always required but is strongly recommended. The buyer must have Maryland auto insurance before registering, get a Maryland safety inspection (required for most used vehicles), and then title and register the vehicle with the MVA, using the Certificate of Title Application (VR-005). A dealer usually handles titling for dealer sales.

New residents must get a Maryland driver's license and title and register their vehicle within 60 days of becoming a Maryland resident. Missing the deadline disqualifies the owner from a credit for titling tax paid in another state and may lead to a citation. A valid Maryland Safety Inspection Certificate is required to title and register the vehicle; emissions (VEIP) testing notices follow about three months after registration.

File an auto insurance complaint with the Maryland Insurance Administration through its secure online complaint portal (enterprise.insurance.maryland.gov/consumer), or download a Property and Casualty complaint form to mail or fax. Questions: 1-800-492-6116 (toll free) or 410-468-2000; TTY 1-800-735-2258. Address: 200 St. Paul Place, Suite 2700, Baltimore, MD 21202.