3

COUNTIES

VEHICLE LAWS – MOTOR VEHICLE ADMINISTRATION –

INSURANCE – MARYLAND AUTOMOBILE INSURANCE FUND –

COUNTIES NOT REQUIRED TO MAINTAIN PIP AND UM

COVERAGE ON THEIR VEHICLES

January 24, 2000

Sean D. Wallace, Esquire

County Attorney for Prince George’s County

Frank Craven, Esquire

County Attorney for Harford County

Barbara M. Cook, Esquire

Solicitor for Howard County

Linda M. Schuett, Esquire 

County Attorney for Anne Arundel County

Virginia W. Barnhart, Esquire

County Attorney for Baltimore County

Charles W. Thompson, Jr., Esquire

County Attorney for Montgomery County

You have requested our opinion whether your self-insured

counties must maintain no-fault personal injury protection (“PIP”)

and uninsured motorist (“UM”) coverage on their vehicles. The

Motor Vehicle Administration (“MVA”) requires self-insured

entities that participate in the MVA’s self-insurance program under

Annotated Code of Maryland, Transportation Article (“TR”), §17-

103, to carry such coverage.

In our opinion, counties are not required by statute to maintain

PIP and UM coverage on their vehicles. Thus, like the State,

counties that self-insure are not subject to the requirements of PIP

and UM coverage that apply to private self-insurers.
4 [85 Op. Att’y

 An insured person may waive UM coverage in excess of the 1

statutory liability coverage requirements and may waive PIP coverage

altogether. IA §§19-906, 19-910.

I

Automobile Liability Coverage

A. Mandatory Automobile Liability Insurance 

Maryland is a compulsory insurance state ) i.e., automobile

liability insurance or its equivalent is a prerequisite to registration of

a motor vehicle. TR §17-104. The compulsory insurance law

assures that motor vehicle owners and operators “are financially able

to pay” for damages from motor vehicle accidents. Enterprise

Leasing Co. v. Allstate Insurance Company, 341 Md. 541, 549, 671

A.2d 509, 514 (1996). The policy underlying the law is to provide

a source of funds to compensate innocent third parties for injuries

from motor vehicle accidents. Id. 

Under the compulsory insurance law, motor vehicle insurance

policies must provide minimum liability coverage of $20,000 for

individual personal injuries, up to a total of $40,000 per accident,

and $15,000 for property damage. Annotated Code of Maryland,

Insurance Article (“IA”) §19-504; TR §17-103(b)(1),(2). Motor

vehicle insurance policies must also provide personal injury

protection to cover medical, hospital, and disability expenses for the

insured, family members, guests and authorized users without regard

to fault (“PIP”) and protection against damages caused by uninsured

motorists (“UM”). IA §§19-505, 19-509; TR §17-103(b)(3), (4). 1

 The MVA may accept “another form of security in place of a

vehicle liability insurance policy” that provides the required

minimum benefits if it finds that the other security – for example,

self-insurance ) provides the requisite minimum benefits. TR §17-

103. The MVA has issued regulations specifying certain vehicle

owners who may self-insure and the requirements for self-insurance.

COMAR 11.18.02.
Gen. 3] 5

 Courts in other states have split on the question whether self2

insurers must provide PIP and UM benefits required by statute for

automobile liability insurance policies. See generally Annotation,

Applicability of Uninsured Motorist Statutes to Self-Insurers, 27

A.L.R.4th 1266.

In states where a certificate of self-insurance is viewed as the

functional equivalent of an insurance policy, self-insurers have been

required to provide PIP and UM coverage 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 self-insurers are exempted from providing

uninsured motorist coverage, their privilege of saving insurance premiums

would work the precise diminution of protection of highway users which

the Legislature refused to countenance.”); National Farmers Union

Property & Casualty Co. v. Bang, 516 N.W.2d 313, 316 (S.D. 1994);

Wright v. Smallwood, 308 S.C. 471, 474, 419 S.E.2d 219 (1992);Hartford

Insurance Co. v. Hertz Corp., 410 Mass. 279, 285-86, 572 N.E.2d 1

(1991); Twyman v. Robinson, 255 Ga. 711, 712, 342 S.E.2d 313 (1986);

Modesta v. Southeastern Pennsylvania Transportation Authority, 503 Pa.

437, 441-42, 469 A.2d 1019 (1983).

Other states, however, hold that self-insurance is not an insurance

policy and, therefore, not subject to the statutory requirements of PIP and

UM coverage. See, e.g., McSorley v. Hertz Corp., 885 P.2d 1343, 1350

(Okla. 1994)(“The fact that a self-insurer is financially responsible for its

own vehicles or their operation does not transform it into an insurer as

contemplated by the insurance code.”); Lipof v. Florida Power & Light

Co., 596 So.2d 1005, 1008 (Fla. 1992); City of Gary v. Allstate Insurance

Co., 612 N.E.2d 115, 118 (Ind. 1993); Coltney v. New England Telephone

and Telegraph Co., 600 A.2d 940, 941 (N.H. 1991); Ellis v. Rhode Island

Public Transit Authority, 586 A.2d 1055, 1060 (R.I. 1991).

B. MVA Self-Insurance Program

The MVA self-insurance regulations apply to all self-insurers

in Maryland “except the State and federal government.” COMAR

11.18.02.01. Applicants for certification as a self-insurer must

provide “security of a type and amount acceptable to the [Motor

Vehicle] Administration” that benefits will be paid as required by

Title 17 of the Transportation Article. COMAR 11.18.02.03A. 2

Under those regulations, a local government is considered a “Class

C” self-insurer. The minimum security required for a Class C selfinsurer is a letter signed by its top elected official and comptroller

guaranteeing that any valid claims will be paid. COMAR

11.18.02.04D(3). The regulation itself does not define what claims

are “valid” against a local government that self-insures. Rather, the
6 [85 Op. Att’y

regulation requires self-insurers to “provide the same benefits”

required by Title 17 of the Transportation Article. COMAR

11.18.02.03A(1). Thus, whether counties that self-insure must

provide PIP and UM coverage depends upon the application of the

compulsory insurance law to those entities.

II

PIP and UM Coverage in State and Local Government

A. Application of PIP and UM Requirements to State

The Court of Appeals of Maryland has twice analyzed the

requirement of PIP and UM coverage in the context of a State

agency and concluded that the State is not required to provide PIP

and UM benefits. Nationwide Mutual Ins. Co. v. USF&G, 314 Md.

131, 550 A.2d 69 (1988) and Harden v. Mass Transit

Administration, 277 Md. 399, 354 A.2d 817 (1976). The reasoning

on which these decisions are based suggests that the Court would

also reach the same result with respect to counties. 

In Harden, the Court held that the Mass Transit Administration

was not required to maintain no-fault personal injury insurance

coverage ) i.e., PIP benefits ) for its passengers. In Nationwide,

the Court held that an insurance policy covering State motor vehicles

did not have to include PIP or UM coverage. In both cases, the

Court reasoned that the sections of the State motor vehicle and

insurance laws that require vehicle owners to maintain PIP and UM

coverage as a condition of vehicle registration do not apply to the

State. This holding was based on the principle that “the State is not

deemed to be bound by an enactment of the General Assembly

unless the enactment specifically names the State or manifests a

clear and indisputable intention that the State is to be bound.”

Nationwide, 314 Md. at 142 (quoting City of Baltimore v. State, 281

Md. 217, 223, 378 A.2d 1326 (1977)). Because neither the

insurance code or the motor vehicle law specifically requires the

State to provide UM and PIP benefits, the Court affirmed the denial

of claims for such benefits in Harden and Nationwide. In addition,

in Nationwide, the Court held that the limited waiver of sovereign

immunity in the motor vehicle law for claims arising out of negligent

use of a government vehicle applied only to tort liability and not to

statutory and contractual PIP and UM claims. Nationwide, 314 Md.

at 147-50.
Gen. 3] 7

B. Application of PIP and UM Requirements to Political

Subdivisions

In a previous opinion this Office applied the reasoning of

Nationwide and Harden to a proposal by Baltimore City to exclude

PIP and UM coverage of its employees from its self-insurance

program. Opinion No. 89-005 (February 15, 1989) (unpublished).

That opinion concluded:

While the Nationwide and Harden

decisions dealt with the issue of whether the

State could be required to provide UM and

PIP coverage for its insured vehicles, the

holdings would apply equally to Baltimore

City. The general rule is that neither the State

nor its subdivisions are included in legislation

imposing obligations on “persons,” unless the

statute specifically provides for the inclusion

of the governmental entity...Baltimore City is

“a separate political entity similar in character

to the several counties ....” For the same

reasons that the Court of Appeals found in

Nationwide that the State was not a “person”

required to obtain PIP and UM coverage, we

conclude that the City of Baltimore is not a

“person” or an “owner” required to provide

UM and PIP coverage on its vehicles.

Opinion No. 89-005 at pp. 3-4 (citations and footnotes omitted). 

Notably, the Local Government Tort Claims Act, Annotated

Code of Maryland, Courts & Judicial Proceedings Article, §5-301 et

seq., contains a limited waiver of sovereign immunity as to local

governments for tortious acts of employees within the scope of their

employment. However, consistent with the reasoning of

Nationwide, that waiver is limited to tort liability and does not

subject political subdivisions to the statutory requirements of PIP

and UM coverage. 

While political subdivisions are not required to maintain PIP

and UM coverage, nothing prohibits a local government from

providing such benefits as part of its self-insurance program. Even

if a local government does not provide such benefits, there is a
8 [85 Op. Att’y

 Courts in other jurisdictions have noted that claimants have 3

recourse to an unsatisfied claim and judgment fund while holding public

entities exempt from statutory requirements of PIP and UM coverage.

Ross v. Transport of New Jersey, 114 N.J. 132, 553 A.2d 12, 15, 19

(1989); Nassau Insurance Co. v. Guarascio, 82 A.D.2d 505, 442 N.Y.S.2d

83, 88 (N.Y.App.Div. 1981).

source of funds available to compensate individuals who are not at

fault from injuries in accidents with a government-owned motor

vehicle. The Maryland Automobile Insurance Fund (“MAIF”) is

funded by uninsured motorist assessments to pay injury and damage

claims of qualified persons without recourse to any other insurance.

IA §20-601 et seq.; TR §17-106(e)(2). Consistent with the design

of the Maryland compulsory insurance law, this ensures a source of

funds to pay compensation for valid claims arising from motor

vehicle accidents. See Enterprise Leasing Co., supra. 

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III

Conclusion

It is our opinion that counties that self-insure are not required

to maintain PIP and UM coverage on their vehicles. 

J. Joseph Curran, Jr.

Attorney General

Jonathan Acton, II

Assistant Attorney General

Robert N. McDonald

Chief Counsel

 Opinions and Advice