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Can You Stack Insurance Policies in Maryland?

For years, Maryland law—specifically Insurance Code Section 19-513—expressly prohibited the stacking of insurance policies. This meant that for uninsured/underinsured motorist coverage, the insurer was liable to its insured for the full amount of the accident victim’s damages minus the amount paid by the liability carrier or the Defendant.

After years of criticism for this, the Maryland legislature finally changed the law. As of July 1, 2018, insurance companies who write private auto policies in Maryland are required to offer something called Enhanced Underinsured Motorist Coverage (EUIM). Insureds who chose to add EUIM to their policy will be able to “stack” coverage to ensure they receive full compensation up to their UIM limits. This means that drivers with EUIM can get a policy limit settlement and still get the full policy limits of their UIM coverage.

Here is a simplified example to demonstrate how stacking will work for drivers with the new EUIM coverage and for drivers who don’t have EUIM coverage:

NO EUIM:  P gets rear-ended by D and suffers $400,000 in damages. D has a $100,000 liability policy and P has a $300,000 UIM (without the new enhanced EUIM coverage). If P gets a policy-limit settlement from D for $100,000, he will only be able to get $200,000 from his UIM coverage. P is not permitted to stack coverages so he is left with a $100,000 uncovered gap.

WITH EUIM:  P gets rear-ended by D and suffers $400,000 in damages. D has a $100,000 liability policy and P has a $300,000 EUIM (which allows for stacking of coverages). If P gets a policy-limit settlement from D for $100,000, he can still recover the full $300,000 under his EUIM policy. The $100,000 uncovered gap is covered by the EUIM.

It’s important to keep in mind that for now, policies with EUIM in Maryland will be the exception and not the norm. Any policies written prior to July 1, 2018, will not have EUIM. Even for newer policies, the insured has to opt-in and pay a higher premium for EUIM so it’s not going to be something you regularly see.