G en. 295] 295

All statutory ref

ere nces, unless otherwise spec ifically indicated, 1 areto Article 48A, theInsuranc e Code. I NS URANC E
I N S U R A N C E

) C A S U A L T Y

) V EHI CLE L AW S

) C OL L I SI ON D AMAGE T O R ENTAL V EHI CLES

J ul y27, 1994

The H onor abl e Mi chael

J. W agner Ma ry la n d

S e n a te O n b eh alf o f y o u r co n sti tuen t, E n terpri s e R ent

- A

- C ar , y ou have r eques t ed ouropi ni on on the m eani ng of ce r t ai n pr ovi s i ons of A r t i cl e 48A , §541( d) of t he M ary l and C ode, r el at i ng t o col l i s i on d a m a g e to re n tal v e h ic le s
. T h e p ro v isio n s a t issu e w e re a d d e d to 1 t he I ns ur ance C ode l as ty earas a r es ul tof t he enact m ent of C hapt er 2 6 1 (S e n a te B ill 7 3 2 ) o f th e L a w s o f

M a ryla n d 1 9 9 3

. W hen a r ent al vehi cl e i s i nvol ved i n an accide n t w i t h an u n i n s u r e d mo t o r i s to r a v e h i c l e wh o s e d r i v e ri s n o tk n o wn ( “phant om vehi cl e”) , t he t w o i ns ur ers thatm i ghtbe l i abl e fort he col l i s i on damage ar e t he i ns ur ercover i ng t he fl eetof vehi cl es l eas ed b yth e re n tal c a r c o m p a n y , u n d e r a c o m m e r c ial f lee t au to m o b ile pol i cy ; ort he i ns ur ercover i ng t he per s on w ho has r ent ed the ca r , t he l essee, un der a personal autom ob ile i nsurance p oli cy
. E nterpri se as s er t s t hatt he r es pons i bl e i ns ur eri s t he l es s ee’ s i ns ur er , t hr ough t he c o lli sio n c o v e ra g e th a t is p a rt o f th e les se e ’s p e rso n a l au to m o b ile i ns ur ance pol i cy , and base s i t s concl us i on on §541( d) ( 4) ( i v) , w hi ch st at es as fol l ow s:

A n i ns ur erm aynotdeny co ver age t o an i ns ur ed forcol l i s i on damage t o a r ent al vehi cl e bec aus e: 1. T he ac ci denti nvol ved an uni ns ur ed m ot or i s t ; or 2. T he i dent i t y of t he mot orvehi cl e ca us i ng t he damage ca nnotbe as cer t ai ned.296 [7 9 O p
. A tt ’y

Subtit le 35 of the Insuranc e Code spec ifies ce rtain cove rag es that 2 arerequire d to be a pa

rt of m otor vehicleliability insurancepolicies issued in this state. For example, Section 539 presc ribes a minimum coverag e of $2 ,5 00 fo r m e dic a l, h os pit a l, a nd dis a bil i t y b en e f i t s, a c ov e rag e c omm on ly ref erred to as Personal Injury Protection bene fits or PIP. Section 541(a) inc or po rate s the prov isi on s in Ti tle 17 of the Trans po rt atio n Arti cle re qu iringdrivers to h ave“ se c urity” in t hefo rm of a mot or ve hic lelia

bil ity po l i cy wi thth e m i n i mumco v er age s s p ec i fi edi n§ 1 7 -1 03(b)( 1) through (4) of the Transportation Ar

ticle. For t he r eas ons s t at ed bel ow , w e concl ude t hat§541( d) ( 4) ( i v) d o e s n o t s p e c if

yw h ich in su re r w ill b e re sp o n sib le f o r p ro p e rty damage t o a r ent al v ehi cl e t hathas been da m aged byan uni ns ur ed m ot or i s t

. T he addi t i on of t hi s pr ovi s i on, as w el l as t he ot herchange s m ade t o §541( d) bySenat e B i l l 7 32, w er e noti nt ended byt he G ener al A s s embl yt o al l ocat e r es pons i bi l i t ybet w een i ns ur er s fort he damage t o a r ent al vehi cl e. R at her , t he l egi s l at i ve cha nge w as m ade s i m pl yt o cl ar i fyt hata paym entundera l es s ee’ s col l i s i on cover age, w hi ch b y l aw ext ends t o r ent al vehi cl es , m aynotbe deni ed t o t he l es s ee i f t he damage i s caus ed byan uni ns ur ed mot or i s tora phant om vehi cl e. T he new pr o v isi ons do notaff ectt he obl i gat i on of t he les so r to c a rryc e rta in u n in su re d m o to rist c o v e ra g e f o r p ro p e rty damage as r equi r ed byt he Tra ns por t at i on A r t i cl e.

I
L es s ee’ s C ol l i s i on C overage Y ouri nqu ir y relate s t o col l i s i on cover age, a t ype of i ns ur ance cov erage w hich i s noti n t he l i s tof m andat or yaut om obi l e i ns ur ance c o v e ra g e s re q u ire d b yM a ry lan d law

. C o ll isio n c o v e ra g e is 2 o p tio n a l. Itis d e f

in e d in § 5 4 1 (d )(3 ) a s: i nsurance w i t ho ut r ega rd t o fau l tagainst acc i dent al pr oper t ydamage t o t he i ns ur ed m ot orvehi cl e ca us ed byphy s i cal cont actof t he i ns ur ed mot or vehi cl e w i t h anot herm ot or vehi cl e orw i t h an o the robj ectorbyups etof t he i ns u red m ot orvehi cl e, i f t he ac ci dent o c c u rs w ith in th e U n ited S tate s o f A m e ric a , it s t er r i t or i es orpos s es s i ons , C anada orM exi co.G en. 295] 297

Un d e r Su b ti tl e 2 1 o f th e Co mm e r c ial L aw Arti c le , le ssors of 3 renta l vehicles must include in their re ntal motor vehicle agree ment form or in a sepa

ratedocument the f

ollowing notice : “Notice : This contrac t offer s, for a n additional charg e, a c olli s i on damag e waiver to cove r your r e s p o n s ib il it

y f o r d amag e to th e v e h ic le

. B efor e d eciding whether t o p urc h as e th e c o l l i s i o nd am age waiver , you may

wish to deter

mine whether

your o wnaut o m o b i l e i n s ur an ce af fo rd s yo uco v er age for damag e to the re ntal vehicle a nd the amount of the deduc tible under your own insurance co v er age
. T h e p urc h as e o f th i s co l l i s i o nd am age waiver i s not mandatory and may

be waived. Mary land law re q uire s t h a t al lMary land re sid e nts ’ i n s uran ce p o l i ci es wi thco l l i s i o nco v er age a uto matic a lly

e xten d th at col lis ion

c ov e rag e to pa sseng e r c ars rente d b y

theins ur ed’s name d in the policy for a period of 30 da

y s or less.” §1 4- 21 01 (e )( 5) of

theComme rc ia l L aw Artic le . Ano ther do c ument m us t disclo s e th e cost of the c ollisi on damag e waiver a nd any conditions or exclusions applicable to the waiver

. The Consumer Protection Division o f th e Att o rn ey

Ge n er al ’s Of

fi ce h as d ev el o p eda C o l l i s i o nDam age Wai ve r D isc los ur e F or

m f or us e by the rental vehic lebu sin e sse s. Th is form states, in par

t, that the car

renta l agree ment g ener al l y require s the lessee t o acc ept re sponsibili ty for all damag e or loss to a rental car , wh e ther o r n ot t

hele sse e is at f

a ult

. I n 1990, t he G ener al A s s embl y added a new pr ovi s i on, now § 5 4 1 (d )(4 ) , r e q u irin g th a t, i f a p riv a te p a ss e n g e r a u to m o b ile i nsu ran ce p o li cyissue d in M ary land d o es in clud e c o ll isi o n co v erage, t hatcover age mu st ext end t o pas s engercar s “r ent ed byan i ns ur ed for a peri od of 3 0 d ay s or l ess unde r a rent al agreem ent as other w i se defi ned i n §14- 2101 of t he C om m er ci al L aw A r t i cl e. ” See C hapt er 473 of t he Law s of M ary l and 1990. I n 1993, t he G ener al A s s embl y , t hr ough t he ena ct m entof C h a p ter 2 6 1 , m a d e se v e ra l ch a n g e s to § 5 4 1 (d ) a n d o n e c h a n g e to §14- 2101 of t he C om m er ci al L aw A r t i cl e r el at i ng t o col l i s i on d a m a g e w a iv e rs. T h e o n lyc h a n g e to § 5 4 1 (d ) re lev a n t to 3 E nt erpr i s e’ s i nq ui r yi s t he addi t i on of t he l anguage codi fi ed as § 5 4 1 (d )(4 )(iv ):298 [7 9 O p
. A tt ’y

Of the f our cha ng es madeto §541(d) by Chapter 261 , o n ly

the 4 addition of subparagraph ( iv) to §541(d)(4) is releva nt to Ente rp ri s e’s inq uir y . Thea dditi on

of ne w l anguag e fo r § 54 1( d) (2 ) allo ws ins ur e rs to of fer “ op tio na l c ov e rag e fo r d ama g e s in curr e d b y theins ur e d a s a

re su lt of the loss of use of a renta l vehicle.” Another chang e was the addition of a def inition of “passeng er car ” which includes Class M (Multipurpose) vehicles. Finally , a ref

ere nce to the previous definition of a pa sseng er c ar was e liminated from the law. The onl y chang e made to Comm erc ial L aw Article §14- 2101 was the a ddition o f th e samedefinition of “pa sseng er c ar”that w a s n e wly

a dd e d to §5 41 (d) b y

thebil l. A n i ns ur erm aynotdenycover ag e t o an i ns ur ed forcol l i s i on damage t o a r ent al vehi cl e bec aus e: 1. T he ac ci denti nvol ved an uni ns ur ed m ot or i s t ; or 2. T he i dent i t yof t he mot orvehi cl e ca us i ng t he damage ca nnotbe as cer t ai ned. 4

“ W h e n c a lled u p o n to c o n stru e a p a rticu lar sta tu te, w e b e g in ouranal y s i s w i t h t he s t atut ory lang u age i t s el f, as t he w or ds of t he statu te, g iven their ord inaryan d p o p u larl yu n d erstoo d m ea n ing , are th e p rim a ry so u rc e o f leg isla tiv e in ten t. If th e lan g u a g e o f th e sta tu te i s pl ai n and cl earand expr es s es a meani ng cons i s t entw i t h t he sta tu te’ s a p p a re n t p u rp o se , n o f u rth e r a n a ly sis is o rd in a rily r equired

. ” G a rg lia n o v . S ta te , 334 M d. 428, 435, 639 A

. 2d 675 (1 9 9 4 ) (c itatio n s o m itt e d ). A ll sta tu to rytex t o u g h t to b e v iew e d in c o n te x t, h o w e v e r, i n c lu d in g its r e l a t i o n s h ip to o th e r l a w s
. NCR C orp. v. C om

ptr oll er of

T reasury , 313 M d. 118, 125, 544 A

. 2d 764 (1 9 8 8 ). A N

A T o w in g, In c . v. P rin c e G e o rg e ’s C o u n ty , 314 M d. 711, 7 1 8 n
. 5 , 5 2 2 A

. 2 d 1 2 9 5 (19 8 9 ). In th is i n stan ce , b o th the statu tory t ex t an d i t s cont extm ake mani fes tt he l i m i t ed s cope of § 5 4 1 (d )( 4 )( iv ). C ons i der i ng t he pl ai n m eani ng of i t s t ext , §541( d)(4) ( i v) s i m pl yaddr es s es t he r el at i ons hi p bet w een a n ins ur erpr ovi di ng col l i s i on cover age and t he i ns ur ed w ho has pur chas ed t he cove r age. N o m ent i on i s m ade of

t he l es s orof t he r ent al vehi cl e t hathas been d am aged i n a col l i s i on w i t h an uni ns ur ed mot or i s tora phant om v e h ic le

.G en. 295] 299
T he s t atut or yl anguage i s s i m pl e and di r ect : t he i ns ur er“may no tden ycov erage t o an i nsured. ” T his l ang uag e perhap s ass um es, b u t itsu re lyd o e s n o t re q u ire , tha t a n in s u r e d re n tin g a v e h icle damaged byan uni ns ur ed mot ori st o r p hant om vehi cl e w i l l fi l e a cl ai m w i t h t he i ns ur erpr ovi di ng col l i s i on cover age, i f s uch opt i onal cover age w as pur chas ed. A ccor di ng t o t h e d efi ni t i on of col l i s i on cover age, a “no- faul t ” cove r age, and t he exp li citpr ovi s i ons of § 5 4 1 ( d ) ( 4 ) ( i v ) , a c l a i m un d e rc o l l i s i o n c o v e r a g e t o h a v e a r e n t al vehi cl e r epai r ed fol l ow i ng a col l i s i on w i t h an uni ns ur ed orphant om vehi cl e w i l l be pai d byt he i ns ur er
. I tw oul d be a vi ol at i on of t he l aw fo r t h e lesse e’s insu rer to d en ythe c o ll isi o n claim ev en tho u g h there m aybe ot heri ns ur ance t hat coul d covert he l os s
. B ut§541( d) ( 4) ( i v) s i m pl ydoes notm andat e t he fi l i ng of t he cl ai m i n t he fi r s tpl ace
. I n t he i nt er es tof compl et enes s , w e mayal s o l ook t o any evi dence of t he G en era l A s s embl y ’ s purpos e i n t he l egi s l at i ve h is to ry. Ha r r is v . S ta te , 3 3 1 M d

. 1 3 7 , 1 4 6 , 6 2 6 A

. 2 d 9 4 6 (19 9 3 ); Kaczorow ski v. C i t

y of Ba l t i m ore , 309 M d. 505, 515, 525 A

. 2d 628, 632 ( 1987)

. T he D epar t m entof L egi s l at i ve R efe r ence ’ s fi l e on t he bi l l cons i s t s of j us ta fe w pages
. N ei t hert he Fl oorR epor tnort he amendm ent s r el at e t o t he addi t i on m ade t o §541( d) ( 4)

. I ns t ead, t he focus i s on t he addi t i on of §541(d) ( 2) r el at i ng t o “opt i onal cover age for damages i ncur r ed byt he i ns ur ed as a r es ul tof t he l os s of us e of a r ent al vehi cl e. ” N ot hi n g i n t he bi l l fi l e detr act s fr om t he c o n c lu sio n th a t th e lan g u a g e o f th e a m e n d m e n t sh o u ld b e lit e ra lly a p p lie d

.

II

L es s or’ s P ropert y D am age C overage T he cont extof §541( d) ( 4) ( i v) i ncl udes §18- 1 0 2 o f t he T r ans por t at i on A r t i cl e and the r egul at i ons adopt ed pur s uantt o t hat law . T h e M o to r V e h icle A d m in ist ra tio n w ill n o t re g iste r a v e h icle t hati s t o be r ent ed unt i l t he ow nerof th e v eh ic l e ce r t i fi es t hatt he ow nerhas “s ecur i t yfort he vehi cl e i n t he s ame for m and pr ovi di ng fort he s ame m i ni m um benef i t s as t he sec ur i t y r equi r ed byT i t l e 17 o f th is a rticle f

o r m o to r v e h icle s.” T R § 1 8 -1 0 2 (a ). T h e p e rso n s to be cove r ed byt he “s ecur i t y ” ar e des cr i bed i n T R §18- 102( b) as f o llo w s: “ N o tw ith sta n d in g a n y p ro v isio n o f th e re n tal a g re e m e n t to t he contr ar y , t he s ecur i t yr equi r ed undert hi s s ect i on s hal l covert he o w n e r o f th e v e h icle a n d e a c h p e rso n d riv in g o r u sin g th e v e h ic le w i t h t he perm i s s i on of t he ow nerorl es s ee. ”300 [7 9 O p
. A tt ’y
T he i ns ur ance r equi r ement s forvehi cl es w hi ch ar e t o be r ent ed are det ai l ed in r egu l at i on as fol l ow s:

A per s on i n t he b u sine s s of r ent i ng or leasing m o tor v eh icl es, tr ail ers, o r sem itrail ers sh a ll f ile w ith th e F in a n c ial R e sp o n sib ili ty D i vi s i on of t he A dm i ni s t r at i on, foreac h v e h icle re n ted o r lea se d , a c o p yo f th e liab ili ty i ns ur ance pol i cy o rpr oof of M ary l and s el fi ns ur anc e c e r t i f

i c a t i o n r e q u i r e d u n der T r ans por t at i on A r t i cl e, T i t les 17 and 18, A nnot at ed C ode o f M ary l and, and a c opyof t he s t andar d r ent al orle as e agr eementupon demand. T he i ns ur ance pol i cyors el f- i ns ur er sh a ll provide pri m ary covera ge to the o w ner, the l es s ee, and each pe rs on dr i vi ng orus i ng th e m o to r v e h icle , traile r o r se m itraile r w ith per m i s s i on of t he ow ner or l essee, not w i t hs t andi ng anypr ovi s i ons of th e r ent al or l eas e agr eementt o t he cont r ary . T he ow nerof t he m ot or vehi cl e, t r ai l er , ors emi t r ai l erw hi ch i s t o be r ent ed orl eas ed for a per i od exce edi ng 1 8 0 d a y s m a y sa tisf

y th e o w n e r’s o b lig a tio n to p ro v id e se c u rityb yre q u irin g th e les se e to p r o c u r e t h e s e c u r i t y. C O M A R 1 1

. 1 8

. 0 1

. 0 3 (A ) (em p h asis ad d ed ). I ti s cl earfr om T R §18- 102 and the regul at i on quot ed above t hatt he St at e r equi r es t he ow ner s of r ent al vehi cl es t o pr ovi de t he pr i m ar yi ns ur ance cover age for t he vehi cl es fort hos e cove r ages t hat ar e mandat ed byT R §17- 103. T his m andat ed cove r age i ncl udes cov erage for propert ydam age l osses cau sed by un i nsured m otor i st s. T R §17- 103( b) , s ubs ect i ons ( 1) t hr ough ( 4) , det ai l t he cove r ages r equi r ed byl aw
. Subse ct i on ( 4) r equi r es t he “be nefi t s req u ir ed underA r t i cl e 4 8 A , §541 of t he C ode as t o r equi r ed addi t i onal c o v e ra g e .” T hi s r efe r ence t o §541 r el at es t o t he provi s i ons i n §541( c) ( 1) defi ni ng an uni ns ur ed mot orvehi cl e a n d d e s cr i bi ng i n §541( c) ( 2) t he c o v e r a g e s t h a t m u s t b e i n e v e r y m o t o r v e h i c l e l i a b i l i t y p o l i c y. T h rou g h o u t th is statu te, the f o cu s is on co v era g e f

o r bo d il yinjury a nd death, and t here i s no ex pli ci tm enti on of u ninsur ed p rope rty damage cover age. H ow ever , t he pr oper t ydamage component of uni ns ur ed mot or i s tcover age c an be f ound i n s ubs ect i on ( v) , w hi chG en. 295] 301

s t at es : “I n no cas e s hal l t he uni ns ur ed mot or i s t cover age be l es s t han t he cove r age a ffor ded a qua l i fi ed per s on underA r t i cl e 48A , §§243H a n d 2 4 3 -I ....” U nder§243H , a per s on can make a cl ai m agai ns tt he M ary l and A ut om obi l e I ns ur ance Fund for“cl ai m s for t he death of orper s onal injuryto a q u ali fied p erso n o r fo r d a m a g e to p ro p e rty i n exce s s of $250” ar i s i ng out of t he ow ner s hi p, m ai nt enanc e, or us e of a m ot or veh i cl e and caused byan u nident i fi ed o perato r, an o perat or w ho se w h ere ab o u ts can n o t be a s c e rt aine d , o r an u n insu red o p era tor. T her efor e, t he uni ns ur ed mot or i s tcover age mandat ed by§541( c) ( 2) is g e n e ra lly u n d e rsto o d to in c lu d e c o v e ra g e f o r p ro p e rtyd a m a g e , in addi t i on t o ot herl i abi l i t y co v er ages r equi r ed byT i t l e 17 of the T r ans por t at i on A r t i cl e. T he fa ct t hat ow ner s of re nt al vehi cl es ar e re qui r ed t o pr ovi de pr i m ar y cover age for t he vehi cl e and t he per s ons r ent i ng and dr i vi ng the v eh icl e c an n o t be ig n o red w h en co n side ri n g E n terprise’s c o n ten tio n th a t § 5 4 1 (d )(4 )(iv ) e n a b le s re n tal v e h icle o w n e rs to r ece i ve paym entfr om a l es s ee’ s col l i s i on cover age. T her e i s not hi ng in § 5 4 1 (d )(4 )(iv ) th a t ch a n g e s th e leg a l re q u ire m e n t f o r o w n e r s to pur chas e mandat or ycover ages forr ent al vehi cl es ort hatnegat es t he re g u la to ry c h a ra c te ri z a tio n o f th e le s s o r’ s in s u ra n c e a s “ p ri m a ry.” Fur t her m or e, as di s cus s ed above , t he l es s or ’ s i ns ur a n c e mus ti ncl ude cover age f

orpr oper t ydamage to a r ent al vehi cl e ca us ed byan u n in s u re d m o to ri s t o r p h a n to m v e h ic le

.

III C oncl usi on I n s um m ar y , i t i s ouropi ni on t hatA r t i cl e 48A , §541( d) ( 4) ( i v) does nott r ans for m a l es s ee’ s i ns ur er i nt o t he pr i m aryi ns ur erof t he c o st o f p ro p e rtyd a m a g e to a re n tal v e h icle w h e n th e v e h icle is damag ed byan uni ns ur ed mot or i s tora phant om vehi cl e. N ot hi ng i n t he l aw , how ever , p rev ent s a r ent al vehi cl e ow nerfr om m aki ng d em an d upon t he l es s ee f ort he cos tof t he r epai r s t o t he r ent al vehi cl e i f t he r ent al agr eementpl ace s t he r es pon si bi l i t yfors uch d a m a g e u p o n th e les se e . In su c h a c a se , the les se e m a yc h o o s e to m ake a col l i s i on cover age cl ai m under t he l es s ee’s p ers onal aut om obi l e pol i cy
. I f t he l es s ee doe s s o, t he l es s ee’ s i ns ur erm aynot302 [7 9 O p
. A tt ’y denypaym entof t he cl aim beca us e t he damage w as caus ed byan u n in s u re d m o to ri s t o r p h a n to m v e h ic le

. J. Jo sep h C u rran , Jr. A t t or ney G ener al Susa n C ohen A ssist a n t A tt or ney G ener

al Ja c k S c h w a rtz C hi ef C ouns el O pi ni ons & Advi ce E di tor ’s N

ote: T h e p r o v i s i o n c o n s t ru e d i n t h i s o p i n i o n , f o r me rAr t i c l e 4 8 A, § 5 4 1 , h a s b e e n re c o d if

ie d a t § 1 9 -5 1 2 o f

th e In s u ra n c e A rt ic le

.