Disclaimer: This article is for informational purposes and does not constitute legal advice.
Detailed Answer
Understanding Policy Limits in Maryland
When a driver causes an auto accident, their liability policy covers another driver’s property damage up to the policy limits (Md. Ins. Code Ann. § 19-509). Some policies include a rental reimbursement or loss-of-use endorsement. However, once the insurer pays the full liability limit, it has no further obligation to cover rental car expenses or loss-of-use.
Filing a Claim Under the At-Fault Driver’s Policy
If the at-fault driver’s policy includes a rental reimbursement endorsement, submit your rental invoices directly to that insurer. Maryland law requires insurers to honor this endorsement up to the specified limit (Md. Ins. Code Ann. § 19-510). Absent such an endorsement—or after policy limits are reached—this option ends.
Using Your Own Uninsured/Underinsured Motorist Coverage
Most Maryland auto policies offer optional uninsured/underinsured motorist (UM/UIM) coverage. If the at-fault driver’s limits are insufficient, file a UIM claim with your own insurer (Md. Ins. Code Ann. § 19-509). UIM can cover additional property damage and necessary rental costs up to your policy’s UIM limit.
Pursuing a Negligence Lawsuit for Special Damages
If you lack UIM coverage or exhaust your UIM limits, you may file a negligence lawsuit against the at-fault driver in Maryland courts. You can request “special damages” for out-of-pocket losses, including reasonable rental expenses or fair compensation for loss-of-use of your vehicle. Maryland law allows recovery for damage to property and for losses due to the detention of property (Md. Cts. & Jud. Proc. Code Ann. § 5-108).
Bad Faith Claims Against the Insurer
Under the Maryland Insurance Article, insurers must act in good faith when handling claims. If you can show the at-fault insurer unreasonably refused to settle within policy limits when a proper settlement demand existed, you may file a bad faith action under Md. Ins. Code Ann. § 27-1001 et seq. A successful bad faith claim can yield damages beyond the original policy limits.
Helpful Hints
- Review your insurance declarations page to confirm rental reimbursement and UM/UIM limits.
- Retain all rental invoices, contracts and a daily log of rental periods.
- File claims promptly. Maryland’s statute of limitations for property damage is three years (Md. Cts. & Jud. Proc. Code Ann. § 5-108).
- Send written notice to your insurer if you intend to use UM/UIM coverage.
- Consider consulting an attorney if an insurer denies coverage or offers an unfair settlement.