3 CO UNTI ES V EH I CLE L AW S

– M OT OR V EHI CLE A DMI NI ST RA T I ON

– I NS URAN CE – M ARYL AN D A UTOMO BI LE I NSURANCE F UN D

– C OUNTI ES N OT R E QUI RE D T O M AI NT AI N P IP AN D UM C OVERA GE ON T HE I R V EHI CLES

J anuary24, 2000

Sea n D

. W

allace, Esqu i re C o u n ty A tto rn e

y fo r P rin c e G e o rg e ’s C o u n ty Frank C raven, Esqu i re C o u n ty A tto rn e

y fo r H a rfo rdC o u n ty B arba ra M

. C oo k, Esquir e S o licito r fo r Ho w a rdC o u n ty Li nda M

. Schuet t

, Es qui r e C o u n ty A tto rn e

y fo r A n n e A ru n d e l C o u n ty V i rgi nia W

. B arnh art

, Esquir e C o u n ty A tto rn e

y fo r B a lti m o re C o u n ty C ha rl es W

. T ho m pson , Jr. , Esquir e C o u n ty A tto rn e

y fo r Mo n tg o m e ry C o u n ty Y ou have r eques t ed ouropi ni on w het hery ours el f- i ns ur ed count i es m us tm ai nt ai n no- faul tp erso nal i nj ur ypr ot ect i on ( “PI P”) and uni ns ur ed mot or i s t( “U M ”) cover age on t hei rvehi cl es . T he M ot orV ehi cl e A dm i ni s t r at i on ( “M V A ”) r equir es s el f- i ns ur ed ent i t i es t hat par t i ci pat e i n t he M V A ’ s s el f- i ns ur ance pr ogr am under A nnot at ed C ode of M ary l and, T r ans por t at i on A rt i cl e ( “TR ”) , §17- 103, t o carr ys uch cove r age. In o u r o p in io n , c o u n ties a re n o t re q u ire d b ysta tu te to m a in tain PI P and U M cover ag e o n the i rvehi cl es . T hus , l i ke t he St at e, co u n ti es th at self-ins u re a re n o t subject t o the re q u ir em en ts of P IP and U M cov erage t hat appl yt o p ri vate s el f-i nsurer s.4 [8 5 O p . A tt ’y

An i n s ured person may waive UM coverag e in excess of the 1 s t atut o ry l i ab i l i ty co v er a g e r equ i re m ent s an d m ay wa i v e P IP co v er age altog ether . IA §§19-906, 19-910. I

A ut om obi l e L i abi l i t y C overage A . Mandator

y A utom obile Li abili t

y I nsur ance M ar y l and i s a compulsory ins ur ance s t at e ) i.e ., a u to m o b ile l i abi l i t yi ns ur ance or i t s equi val ent i s a pr er equi s i t e t o r egi s t r at i on of a mot orvehi cl e. T R §17- 104. T he compul s or yi ns ur ance l aw a ss u re s th a t m o to r ve h icle o w n e rs a n d o p e ra to rs “ a re f in a n c iallya b le to p a y ” f

o r d a m a g e s f

ro m m o to r v e h ic le a c c id e n ts
. E nter prise L e a s in gC o . v . A lls ta te In s u r a n c e C o m p a ny , 341 M d. 541, 549, 671 A

. 2d 509, 514 ( 1996)

. T he pol i cyunder l y i ng t he l aw i s t o pr ovi de a s our ce of

funds t o compensa t e i nnocentt hi r d par t i es fori nj ur i es f ro m m o to r v e h ic le a c c id e n ts
. I d. U ndert he compul s or yi ns ur ance l aw , m ot or vehi cl e i ns ur ance pol i ci es m us tpr ovi de mi ni m um l i abi l i t ycover age of $20, 000 for in d iv id u a l p e rso n a l in

ju rie s, u p to a to tal o f

$ 4 0 ,0 0 0 p e r a c c id e n t, and $15, 000 for p r oper t ydamage. A nnot at ed C ode of M ary l and, I ns ur ance A r t i cl e ( “I A ”) §19- 504; T R §17- 103( b) ( 1) , ( 2)

. M otor v eh icl e ins u ran ce p o li cies m u st al so p rov ide p erso n al i n jury pr ot ect i on t o cover m edi cal , hos pi t al , and di s abi l i t yexpens es fort he insu red , fa m il ym em b ers, gu ests an d au tho ri ze d u ser s w ith o u t r eg ard t o faul t( “PI P”) and pr ot ect i on agai ns tdamages caus ed byuni ns ur ed m o tori sts ( “U M ”). IA § § 1 9 -50 5 , 1 9 -50 9 ; T R § 1 7 -10 3 (b)(3 ), (4). 1 T he M V A m ayacc ept“anotherfor m of s ecur i t yi n pl ace of a vehi cl e l i abi l i t yi ns ur ance pol i cy ” thatpr ovi des the re qui r ed m i ni m um benef

i t s i f i tfi nds t hatt he others ecur i t y– forexampl e, s el f- i ns ur ance )pr ovi des t he r equi s i t e m i ni m um benef i t s . T R §17- 1 0 3. T he M V A has i ssued regulat i on s speci fy i ng cert ai n v e h icle ow ner s w ho m ay s el f- i ns ur e and t he r equi r ement s fors el f- i ns ur ance . C O M A R 11. 18. 02.G en. 3] 5

Courts in other states havesplit on the question whe ther self

2 insure rs must provide PIP and UM bene fits require d by statute for automobile liability

insurancepolicies. Se ege ne ra lly Annotation, Ap pli c ab ili ty

of Uni nsured M

oto ris t St

atu te s to Se lf-

In su re rs , 27 A.L .R.4th 1266. In states where a c ertificate of self -insuranc e is viewe d as the fun c ti o n a l e qu iv a lent o f an in s ur an c e p o li c y , s e lf

- in s ur e r s h ave bee n require d to provide P IP and UM c overag e for non-employees. See, e .g., Allstate Insurance Co. v. Shaw , 52 N.Y.2d 818, 820, 418 N.E.2d 388, 436 N.Y.S.2d 873 (1980)( “. . .[I ]f se lf-insurer s are exempted f rom providing uninsured m ot ori stcov erage, thei r pr iv il ege of s avi ng in suranc e premiu ms would work the precisediminuti on of protec tion of highw ay users whic h theL e g isl ature re fu se d to c ountena nc e.”) ; National

Farmers Union Property & Ca s u a l t

y Co. v. Bang , 516 N.W.2d 313, 316 (S.D. 1994); W right v. Smallwood, 3 08 S.C. 47 1, 47 4, 41 9 S. E. 2d 21 9 ( 19 92 ); Ha rtf

or d InsuranceCo. v. Hertz Corp., 410 Mass. 279, 285-86, 572 N.E.2d 1 (1 99 1) ; Twyman v. Robinson , 255 Ga. 711, 712, 342 S.E.2d 313 ( 1986); Mo de sta v . So uth e as te rn Pe nn sy lvan ia Tra ns po rta tio n A uth ority , 503 Pa. 437, 441-42, 469 A.2d 1019 (1983)

. Other s tate s , h o w e v e r , h o ld th at s e lf

- in s ur an c e is n o t a

nin s ur an ce policy and, therefore, not subject to the statutory require ments of PIP and UM cove rag e. See, e .g., McSo r l ey v. He rtz Corp. , 885 P.2d 1343, 1350 (O kla . 1 99 4) (“ Th e fa c t that a se lf -i ns ur e r i s f

ina nc ia lly re sp on sib lefo r i ts own vehicle s or their ope ration does not transform it into an insurer a s con te mpl ate d b y

theins uranc e c od e .” ); Li p o f v . F lo r id a Po we r &Light Co. , 5 96 So. 2d

10 05 , 1 00 8 ( F la . 1 99 2) ; City of Gary v . Allstate Insurance Co. , 61 2 N. E. 2d 11 5, 11 8 ( Ind . 1 99 3) ; Coltney v. N ew England Telephone and Telegraph Co. , 60 0 A .2 d 9 40 , 9 41 (N .H . 1 99 1) ; Ellis v. Rhode Island Pu bli cTra ns it A uth or ity , 586 A.2d 1055, 1060 (R.I . 1991). B . M VA Sel

f
-I nsur ance Progr am T h e M V A self-insu ran ce reg u lat ion s ap p ly to al l sel f-insu rers i n M a r y l a n d “ e x c e p tt h e S t a t e a n d f e d e r a l g o v e r n me n t
. ” CO M AR 11

. 18

. 02

. 01

. A pp l i cants f o r c ert i fi cat i on as a sel f-i nsurerm ust pr ovi de “s ecur i t yof a type and am ountacc ept abl e t o t he [M ot or V ehi cl e] A dm i ni s tr at i on” t hatbenef i t s w i l l be pai d as r equi r ed by T i t l e 1 7 o f t h e T r a n s p o r t a t i o n Ar t i c l e . CO M AR 1 1

. 1 8

. 0 2

. 0 3 A. 2 U nd er tho se r egu l at i on s, a l ocal gov ernm ent i s con si dered a “C l ass C ” s el f- i ns ur er . T he m i ni m um s ecur i t y r equi r ed for a C l as s C s el fi ns ur eri s a l et t ers i gned byi t s t op el ect ed off i ci al and compt r ol l er g u a r a n t e e i n g t h a ta n yv a l i d c l a i ms wi l l b e p a i d

. CO M AR 1 1

. 1 8

. 0 2

. 0 4 D( 3 )

. Th e r e g u l a t i o n i t s e l f d o e s n o td e f

i n e wh a tc l a i ms ar e “va l i d” aga i ns ta l ocal gover nm entt hats el f- i ns ur es . R ather , t he6 [8 5 O p . A tt ’y regul at i on requi res self- i nsurer s t o “p rovi de the sam e ben efi t s” r e q u i r e d b yT i t l e 1 7 o f t h e T r a n s p o r t a t i o n Ar t i c l e . CO M AR 11

. 18

. 02

. 03 A (1)

. T hu s, w hethercou nti es t hat s el f-i nsure m ust pr ovi de PI P and U M cover age de pends upon t he appl i cat i on of the com pu l soryi nsurance law t o those enti t i es.
II PI P and U M C ov e r ag e i n St at e and Loc al G ov e r nm e nt A . A p p lica tio n o

f P IPa n d U M R e q u ire m e n ts to S ta te T he C our tof A ppeal s of M ary l and has t w i ce a naly zed t he re q u ire m e n t o f

P IP a n d U M c o v e r a g e in th e c o n tex t o f a S tate ag en cy an d co n clud ed that the S tat e i s n o t req u ir ed to p ro v id e P IP a n d U M b e n e f

its

. N ati on w i de MutualIns. C o. v. U SF &G , 314 M d. 131, 550 A

. 2d 69 ( 1988) and H a rd e n v . M

a ss T ra n sit A dm i nis t r at i on , 277 M d. 399, 354 A

. 2d 817 ( 1976)

. T he r eas oni ng o n w h ich th e se d e c isio n s a re b a se d su g g e sts th a t th e C o u rt w o u ld a ls o re a c h th e s a m e re s u lt w ith re s p e c t to c o u n tie s . I n H ar den , t he C our thel d t hat t he M as s T r ans i tA dm i ni s t r at i on w as not req u ir ed t o m ai nt ai n no- faul tper s onal i nj ur yi ns ur ance cover age ) i

. e. , PI P be ne fi t s ) fo r i t s pas s enger s . I n N at i onw i de , t he C our thel d t hatan i ns ur ance pol i cy cover i ng St at e m ot orvehi cl es di d nothave t o i ncl ude PI P or U M cove rag e. In bot h cas es , t he C our tr eas oned t hatt he s ec ti ons of t he St at e mot orvehi cl e and i n s u r a n c e l a ws t h a tr e q u i r e v e h i c l e o wn e r s t o ma i n t a i n P I P a n d UM cove rag e as a condi t i on of vehi cl e r egi s t r at i on do notappl yt o t he St at e. T hi s hol di ng w as bas ed on t he pr i nci pl e that“the St at e i s not d e e m e d to b e b o u n d b y an e n a c tm e n t o f th e G e n e ra l A ss e m b ly un l ess th e e nactm ent s pecifi cal l ynam es t he S t at e or m anifest s a c le a r a n d ind ispu table inten ti o n that the S tat e is t o b e b o u n d .” N at i onw i de , 314 M d. at 142 ( q u o tin g C ity o f B a lti m o re v . S ta te , 281 M d. 217, 223, 378 A

. 2d 1326 ( 1977) )

. B eca us e nei t hert he i ns ur ance code ort he mot orvehi cl e l aw s peci fi cal l yr equ ir es t he St at e t o pr ovi de U M and PI P be nefi t s , t he C our taff i r m ed t he deni al of cl ai m s fors uch bene fi t s i n H ar den and N

at i onw i de

. I n addi t i on, i n N at i onw i de , t he C our thel d t hatt he l i m i ted w ai verof s over ei gn i m m uni t y i n t he m ot or vehi cl e l aw forcl ai m s ar i s i ng outof negl i gent u se o f a g o v e rn m e n t v e h icle a p p lied o n ly to to rt liab ili tya n d n o t to s ta tu to ry a n d c o n tr a c tu a l P IP a n d U M c la im s . N at i onw i de , 314 M d. at147- 50.G en. 3] 7 B . A ppli cati on of

P I Pand U

M R equir em ent

s to P oli ti cal Subdi v is i ons I n a pr evi ous opi ni on t hi s O ffi ce a ppl i ed the r eas oni ng of N at i onw i de and H

ar den t o a pr opos al by B al t i m or e C i t yt o excl ude PI P and U M cover age of i t s empl oy ees from i t s s el f- i ns ur ance p rog ram . O p inion N o . 8 9 -00 5 (F eb rua ry1 5 , 1 9 8 9 ) (un p u b li sh ed ). T hatopi ni on concl uded:

W hi le t he N

at i onw i de and H

ar den d e c i s i o n s d e a l t wi t h t h e i s s u e o f whe t h e rt he St at e coul d be r equi r ed t o pr ovi de U M and PI P cover age f

or it s i ns ur ed vehi cl es , t he h o lding s w o u ld ap p lye q u all yto B alt im o re C ity

. T h e g e n e ra l r u le is th a t n e ith e r th e S tate nori t s s ubdi vi s i ons ar e i ncl uded i n l egi s l at i on i m pos i ng obl i gat i ons on “per s ons , ” unl es s t he s t atut e s peci fi cal l ypr ovi des fort he i ncl us i on o f th e g o v e rn m e n tal e n tity .. .B a lti m o re C ityis “a s epar at e pol i t i cal ent i t y s i m i l ar i n char act er t o t h e s e v e r a l c o u n t i e s . . . . ” F o rt h e s a me re a s o n s th a t th e C o u rt o f A p p e a ls f

o u n d in Nat i o n wi de t hatt he St at e w as nota “pe r s on” r e q u i r e d t o o b t a i n P I P a n d UM c o v e r a g e , we c o n c lu d e th a t th e C it y o f B a lti m o re is n o t a “per s on” oran “ow ner ” r equi r ed t o pr ovi de U M and P IP cov erage on i t s vehicl es. O p in io n N o . 8 9 -0 0 5 a t p p . 3 -4 (c ita tio n s a n d f o o tn o te s o m itte d ). N ot abl y , t he L ocal G over nm entT or tC l ai m s A ct , A nnot at ed C ode of M ar y l and, C our t s & J udi ci al Pr ocee di ngs A r t i cl e, §5- 301 et s eq . , cont ai ns a l i m i t ed w ai ver of s over ei gn i m m uni t y as to loc al g o v e rn m e n ts f

o r to rtio u s a c ts o f e m p lo y e e s w ith in th e sc o p e o f th e ir empl oy m ent
. H ow ever , con sist entw i t h t he r eas oni ng of N at i onw i de , thatw ai veri s l i m i t ed t o t or tl i abi l i t yand does not su b je c t p o li ti ca l sub d ivisi o n s to the statu toryreq u ir em en ts of P IP a n d U M c o v e ra g e . W h i l e pol i t i cal s ubdi vi s i ons ar e notr equi r ed t o m ai nt ai n P IP and U M cover age, not hi ng pr ohi bi t s a l ocal gover nm entfr om pr ovi di ng s uch bene fi t s as par tof i t s s el f- i ns ur ance pr ogr am. E ven i f a l ocal gov ern m e n t d oes no tprovide such b enef i t s, t here i s a8 [8 5 O p . A tt ’y

Courts in other jurisdictions h ave note d that claimants have 3 re c ours e to a

n un satis fi e d c la im and judgme nt fu nd wh ileho ldi ngpu

bli c entities exempt from statutory require ments of PIP a ndUM coverag e. Ross v. Transport of N

ew Je rsey , 1 1 4 N

. J. 1 3 2 , 5 5 3 A

. 2 d 1 2, 15, 19 (1 98 9) ; Na ss au Ins uran ce C o. v. G ua rasc io , 8 2 A.D.2d 505, 442 N.Y.S.2d 83, 88 (N.Y.A

pp.Div. 1981). s our ce of funds avai l abl e t o compensa t e i ndi vi dual s w ho ar e notat faul tfr om i nj ur i es i n acc i dent s w i t h a governm ent -ow n ed m ot or v e h icle

. T h e M a ry lan d A u to m o b ile In su ra n c e F u n d (“ M A IF ” ) is funded by uni ns ur ed m ot or i s t as s es s m ent s t o payi nj ur yand damage cl ai m s of qual i fi ed per s ons w i t hout r ecour s e t o any ot heri ns ur ance . I A §20- 601 et seq. ; T R §17- 106( e) ( 2)

. C ons i s t entw i t h t he des i gn of t he M ar y l and com pul s or y i ns ur ance l aw , t hi s ens ur es a s our ce of funds t o paycompensa t i on forval i d cl ai m s ari sing f r om m ot or veh i cl e acci den t s. See E nter prise Lea si ng C o. , supra . 3

III

C oncl usi on I ti s our opi ni on t hat count i es t hat s el f- i ns ur e ar e not r equi r ed to m a in ta in P IP a n d U M c o v e ra g e o n th e ir v e h ic le s .
J. Jo sep h C u rran , Jr. A t t or ney G ener al Jo n atha n A cton , II As s is ta ntA t t or ney G ener al R o b e rt N . M c D o n a ld C hi ef C ouns el O pi ni ons and A dvi ce