Maryland Car Insurance Guide

Whether you live near our nation’s capital or on the Eastern shore of the Chesapeake Bay, all Maryland residents need car insurance to drive legally. But what are the minimum requirements? What additional options do drivers have? Do business owners need to know anything special? We’ll answer all these questions and more in our Maryland Car Insurance Guide!

Auto Insurance Defined

Chances are, you’ve purchased a car insurance policy before. After all, it’s required in just about every state around the country. But have you ever been a little confused about what auto insurance actually is? If so, you’re not alone, which is why we’re here to help break it all down.

Auto insurance is a contractual agreement between you and the insurance company you choose after shopping around. Your insurance company agrees to pay for your damages after a covered accident as outlined in your policy long as you pay your premium.

Car Insurance Coverages Required in Maryland

Wondering what car insurance laws look like in Maryland? Well, every driver in the Old Line State must carry minimum liability coverage because even if you’re typically a careful driver, you could cause a crash with one small lapse in focus. And if you ever cause an auto accident, liability insurance could save you from paying thousands in damages out of pocket. While liability insurance is typically thrown around as one cohesive term, it’s actually composed of two different types of coverage: bodily injury liability coverage (BI) and property damage liability coverage (PDL).

In addition to liability coverage, Maryland residents must carry uninsured motorist coverage (UM). Insurers will also include PIP coverage in your auto insurance quote. However, you may submit a written letter foregoing PIP coverage.

Bodily Injury Liability Coverage Defined

Any accident (from small fender benders to multi-car collisions) can cause serious injuries that lead to a mountain of medical expenses, which is why Maryland requires every policy to have bodily injury liability coverage in force. This coverage provides valuable financial protection if you’re responsible for a car crash that injures or kills another person (or multiple people).

Bodily injury liability coverage helps pay for the other driver’s medical expenses and, if necessary, their passengers’ medical expenses. It can also help pay for funeral expenses if you cause a crash that results in someone else’s death and your legal defense fees if you’re sued. However, bodily injury liability coverage does not pay for your own medical bills if you are the one who caused the accident. 

Property Damage Liability Coverage Defined

If you’ve ever been in a wreck, you’re probably well-aware how much a car accident can really cost. Even if you rear-end someone in a parking lot, car-repair expenses add up in a hurry. And if you’re the one at-fault in an accident, you definitely don’t want to pay for vehicle repairs out of pocket. This is why PDL coverage can be a lifesaver.

Property damage liability coverage helps pay to repair or replace another person’s property when it is damaged or destroyed in an accident you cause. While it is commonly associated with vehicle repairs and replacements, property damage liability will also pay to for damage to telephone poles, mailboxes, fences, walls, storefronts, and more.

Uninsured Motorist Coverage Defined

In an ideal world, everybody would follow state insurance laws. If there were accidents, the claims process would run smoothly, and any expenses would be taken care of by insurers. However, some people choose to drive uninsured, which can complicate matters. In fact, the Insurance Information Institute estimates that 14.1% of drivers in Maryland are uninsured. 

To help protect people from these uninsured individuals, Maryland requires drivers to carry uninsured motorist coverage on their policy. This way, if you’re ever involved in a wreck with an uninsured driver, you’ll have coverage that can help you pay for any medical or related expenses you incur. In Maryland, UM also includes coverage for property damage, meaning you can get help paying to repair or replace your vehicle.

What is underinsured motorist coverage (UIM)?

Sometimes you’re involved in a crash where the other driver has insurance, but they don’t have enough coverage to pay for your damages and injuries. In Maryland, UM coverage includes underinsured motorist coverage (UIM) to protect you in these situations. UIM in Maryland includes both property damage and bodily injury coverage.

Personal Injury Protection Defined

Personal injury protection, or PIP coverage, is mandatory in no-fault states. However, some at-fault states, like Maryland, require or encourage drivers to purchase PIP coverage to make sure they’re protected if they’re in accident, no matter who caused the crash. This is because PIP helps pay for certain financial burdens you face after an accident, regardless of fault, like:

• Medical bills – PIP can help you pay for prescriptions, diagnostic tests, surgery, rehab appointments, ambulance trips, and more.
• Lost wages – If you’re unable to work following a covered accident, PIP could help offset some of your lost income.
• Funeral expenses – If a covered accident leads to your death, PIP can help pay for your funeral expenses.
• Miscellaneous services – PIP can help pay for things you’d normally do yourself, like taking care of your children or cleaning the house, while you recover.

Maryland Minimum Insurance Limits

When you purchase car insurance, your policy has something referred to as limits. The limits of your policy are the maximum dollar amount your insurance company will pay for damages under a specific coverage as outlined in your policy. Minimum insurance limits are the smallest dollar amount you can purchase of a given coverage and still meet state insurance requirements. Limits are typically written out as a series of numbers separated by slashes, indicating the amount of coverage required (in thousands). For example, the minimum liability limits in Maryland are 30/60/15, according to the Maryland Insurance Administration, meaning you must carry: 

• $30,000 of bodily injury coverage per person in an accident
• $60,000 of bodily injury coverage total in an accident
• $15,000 of property damage coverage per accident

As we noted above Maryland also requires drivers to carry uninsured motorist coverage, and the limits are the same as they are for liability coverage.

• $30,000 of uninsured motorist coverage (bodily injury) per person in an accident
• $60,000 of uninsured motorist coverage (bodily injury) for all persons in an accident
• $15,000 of uninsured motorist coverage per accident for property damage

Maryland requires $2,500 of PIP coverage per person, but as we noted above, this can be waived with a formal written request.

Penalties for Driving Without Insurance in Maryland

It’s illegal to drive without insurance in Maryland, so don’t do it! Whenever an insurer cancels an auto policy or a person doesn’t renew their policy, the insurance company must notify the Maryland Motor Vehicle Administration (MVA), according to the Maryland Insurance Administration. If the MVA suspects you don’t have active insurance coverage that meets the state’s minimum requirements, they will request for you to file a form called an FR-19 proving you’ve had proper coverage since the vehicle’s registration date. If you can’t verify you’ve been carrying at least the state-required coverage, you could end up: 

• Losing your license plate and registration
• Paying an uninsured motorist fee for coverage lapses - $150 for the initial 30 days uninsured and $7 per day for every additional day
• Having to pay a fee ($25) to get your registration restored after you clear up previous violations
• Being barred from registering a new vehicle until your clear up previous violations
• Losing your license plate if your registration is suspended
• Paying up to $1,000 and facing jail time (up to a year) if you try to dupe insurance officials into thinking you were covered

If these potential penalties aren’t enough, it’s also worth pointing out that if you let your coverage lapse, you might be forced to pay higher premiums in the future when you decide to purchase insurance coverage again.

Optional Coverages in Maryland

While you only need the coverages listed above to comply with Maryland insurance laws, there are other coverage options you might wish to add to your policy. The more coverage you have, the better protected you are in the event of an accident.

Collision Coverage Defined

Want to make sure your vehicle is taken care of in the event of accident? Add collision coverage to your policy! Collision insurance will help pay to repair or replace your vehicle if it’s damaged in a car accident, regardless of fault. Collision coverage is not required by law in Maryland. However, if you’re leasing or financing your vehicle, the lender might make you carry collision coverage on the car. Until you pay off your loan, they have a financial interest in the car and will want to make sure it’s protected in the event of an accident.

Comprehensive Coverage Defined

Comprehensive coverage is often sold with collision insurance, but how do the two differ? Well, comprehensive coverage is sometimes called “other than collision insurance,” and it pays for vehicle damages that result from something other than a typical automobile accident. Comprehensive coverage can come to your aid if:

• A tree branch falls on your car in a storm
• Someone steals or vandalizes your ride
• Your car is damaged by weather conditions or natural disasters
• Your car collides with an animal, big or small.

Just like collision coverage, Maryland doesn’t have any legislation mandating comprehensive coverage. But most insurers will force those who lease or finance their ride to carry comprehensive coverage.

Towing and Labor Coverage Defined

If you purchase comprehensive and collision, you’ll typically have the option to add towing and labor coverage to your policy. This completely optional coverage reimburses you when you need a tow because your car breaks down or is damaged in accident. It also helps pay for the labor costs to fix your vehicle and get it running again.

Rental Reimbursement Coverage Defined

When you’re in an accident, a lot of thoughts rush through your head. Am I okay? Is the other driver okay? Who is at-fault? How much will all these repairs cost? One thing that might slip your mind is the fact you might be without a vehicle while yours is in the shop. And, depending on where you live, this can be a major inconvenience. If you’re in need of a rental car, the costs can add up quickly, but if you add rental reimbursement coverage to your policy, a temporary ride is one less thing to worry about. Rental reimbursement coverage helps pay for your rental car while yours is out of commission following a covered accident or incident. Please note, rental reimbursement coverage is normally only available to those who purchase comprehensive and collision coverage.

What is Medical Payments Coverage

Even if they already have PIP coverage, some Maryland drivers might consider adding medical payments coverage (med pay) to their policy. Med pay gives you additional funds to help cover the cost of medical expenses after a covered accident, no matter who is at fault.

Maryland Nonstandard Auto Insurance

Not everyone has a spotless driving record, and that’s okay. After all, the road is unpredictable, and accidents can happen to anyone. However, depending on your situation, you might be considered a high-risk driver.

What is a high-risk driver?

When insurers give you a car insurance quote, they’re calculating how risky it would be to cover you. Simply put, they classify drivers as “low risk” and “high risk.” High-risk drivers typically pay more for a policy, and some insurance companies decline to provide coverage for such individuals. You might be a high-risk driver if you:

• Own an expensive car
• Possess a below average credit history
• Have never purchased a car insurance policy before
• Let your insurance coverage lapse in the past
• Are a new driver
• Been at-fault in multiple accidents*
• Received several driving citations or speeding tickets*
• Were convicted for DUI/DWI*
• Filed multiple insurance claims*

If you think you might be a high-risk driver, don’t panic. You can still find affordable auto insurance, but you might need to run a search for “non-standard car insurance” or “high-risk auto insurance.” Some companies, like Direct Auto, specialize in non-standard insurance. We work hard to keep car insurance costs low for everyone!

How Much Does Car Insurance Cost in Maryland?

Generally speaking, Maryland drivers pay more for car insurance than in many other states. In fact, Bankrate reports they pay about $200 more each year for full coverage than the nation’s average. However, car insurance rates are unique. They depend on several factors and can significantly vary depending on your situation. Car insurance costs are determined by: 

• The types of coverage you choose and the limits you select
• What kind of vehicle you drive
• The frequency you drive and where you drive
• Demographic information
• Your driving history
• Your credit history

If you’re worried any of these factors are working against you, don’t worry. Your car insurance rate now won’t necessarily be your car insurance rate forever. If you drive carefully and make on-time payments, there’s a good chance your premium will drop in the future.

Maryland Commercial Auto Insurance Policies

If you or your employees are driving a vehicle to fulfill business needs, you probably need commercial auto insurance. After all your hard work, you want to make sure you safeguard yourself, your employees, and your business from auto accidents. Maryland commercial auto policies must meet the same minimum requirements for personal auto policies

• $30,000 of bodily injury coverage per person in an accident
• $60,000 of bodily injury coverage total in an accident
• $15,000 of property damage coverage per accident
• $30,000 of uninsured motorist coverage (bodily injury) per person in an accident
• $60,000 of uninsured motorist coverage (bodily injury) for all persons in an accident
• $15,000 of uninsured motorist coverage per accident for property damage
• $2,500 of PIP coverage per person, unless rejected in writing

However, the Maryland Insurance Administration notes that most businesses purchase much higher coverage limits to make sure they’re protected. They also note commercial policies often come with provisions to cover rented or non-owned vehicles, like when an employee drives their own vehicle for business purposes. Try to learn the basics of commercial coverage and then talk to a knowledgeable agent to ask questions and learn about the terms and conditions you don’t understand.

Motorcycle Insurance in Maryland

Wondering what motorcycle insurance laws look like in Maryland? Well, they’re the same as they are for other motor vehicles, according to the Maryland Insurance Administration: 

• $30,000 of bodily injury coverage per person in an accident
• $60,000 of bodily injury coverage total in an accident
• $15,000 of property damage coverage per accident
• $30,000 of uninsured motorist coverage (bodily injury) per person in an accident
• $60,000 of uninsured motorist coverage (bodily injury) for all persons in an accident
• $15,000 of uninsured motorist coverage per accident for property damage 

Get More Information

Still have unanswered questions about auto insurance coverage in Maryland? We’re here to help! Give us a call or visit our website for a free quote.

Maryland Insurance Resources

• Maryland Insurance Administration
• Maryland Vehicle Administration
• Maryland’s Consumer Guide to Auto Insurance