Starting today, July 1, residents of Maryland will see a variety of new laws come into effect. Here's what you need to know about new laws that apply to your vehicles and auto insurance.
The cost to register a vehicle in Maryland will increase 60-75%. The current fees of $137 every two years for cars weighing up to 3,700 pounds and $187 for heavier vehicles will be replaced by a new every-two-year schedule: cars weighing up to 3,500 pounds will cost $221, vehicles weighing between that and 3,700 pounds will pay $241 and those above 3,700 pounds will cost $323 for a two-year registration. The increased fees also include a $40 surcharge earmarked for state’s emergency medical system operations.
Maryland will also increase the fines for driving without insurance. These fines are assessed when the MVA is notified that coverage has lapsed on a car with active plates. Vehicle owners will be assessed an initial penalty of $200 per vehicle for the first 30 days without insurance, and then an additional penalty each day thereafter of $7/ day until new coverage has been obtained or the plates have been returned to the MVA. The maximum annual penalty has increased from $2500 to $3500.
Currently, auto insurance policies in Maryland are issued with standard underinsured motorist coverage, which typically matches your liability coverage. Enhanced underinsured motorist coverage is an optional coverage that you must specifically ask to be added to your policy. Beginning July 1, 2024, however, that will change for all newly issued automobile insurance policies. Starting today, enhanced underinsured motorist coverage will become the default, unless you "opt- out". Enhanced underinsured motorist coverage will not be added to existing policies at this time, only new policies. Read on below for a comprehensive breakdown in UM/UIM coverage vs EUIM coverage:
Underinsured Motorist (UIM) Coverage is an insurance provision that provides protection when you are involved in an accident with a driver who has insurance, but their coverage limits are insufficient to cover the full extent of the damages or injuries. UIM coverage helps fill the gap between the at-fault driver's insurance limits and the actual expenses incurred.
- Purpose: To cover the shortfall when the at-fault driver’s insurance is inadequate.
- Activation: Triggered when the at-fault driver’s liability limits are less than the policyholder’s UIM limits.
- Coverage: Pays for medical expenses, lost wages, and other damages that exceed the at-fault driver’s insurance limits up to the UIM policy limits.
Enhanced Underinsured Motorist (EUIM) Coverage is a more robust form of UIM coverage that provides additional protections and benefits. Introduced to offer more comprehensive protection, EUIM coverage has distinct features that differentiate it from standard UIM coverage.
Stacking of Coverage:
- EUIM: Allows for stacking of coverage across multiple vehicles insured under the same policy. This means the policyholder can combine the EUIM limits of each insured vehicle, potentially increasing the total available coverage in an accident involving an underinsured motorist.
- UIM: Does not typically allow for stacking, limiting coverage to the UIM limits of a single vehicle.
Coverage Activation:
- EUIM: Provides broader protection and is designed to ensure that the policyholder can access the full extent of their coverage limits regardless of the at-fault driver’s insurance status.
- UIM: Only activates if the at-fault driver’s insurance limits are less than the policyholder’s UIM limits, and only up to the difference between the two.
Policyholder Choice:
- EUIM: Gives policyholders more control and flexibility over their coverage limits and how they are applied in the event of an accident.
- UIM: Offers less flexibility, as it is more rigid in terms of how and when the coverage is applied.
Comprehensive Protection:
- EUIM: Designed to provide more comprehensive protection by ensuring that policyholders have access to higher total coverage amounts through stacking and broader applicability.
- UIM: Provides essential protection but may not offer the same level of comprehensive coverage due to limitations on stacking and activation criteria.
Both UIM and EUIM coverages are crucial for protecting drivers against the financial impact of accidents involving underinsured motorists. However, EUIM offers enhanced benefits, greater flexibility, and more comprehensive protection, making it a valuable option for drivers seeking to maximize their coverage and ensure adequate protection in various accident scenarios.