MARYLAND AUTOMOBILE INSURANCE FUND

ORIGIN & FUNCTIONS

[photo, Maryland Automobile Insurance Fund, Annapolis, Maryland] In 1957, the Maryland Automobile Insurance Fund (MAIF) began as the Unsatisfied Claim and Judgment Fund Board (Chapter 836, Acts of 1957). The Maryland Automobile Insurance Fund was created to replace the Maryland Automobile Insurance Plan and the Unsatisfied Claim and Judgment Fund, effective January 1, 1973 (Chapter 73, Acts of 1972).

Maryland Automobile Insurance Fund, Annapolis, Maryland, February 2001. Photo by Diane F. Evartt.

The Maryland Automobile Insurance Fund sells automobile insurance to Marylanders who are unable to obtain it privately. To be eligible for liabilty insurance from the Fund, a driver must have been rejected by at least two private insurers or have had automobile liability insurance cancelled or not renewed for any reason other than nonpayment of premiums. In providing insurance, the Fund acts as any private insurance company and is subject to regulation by the Maryland Insurance Commissioner. The Fund also processes and pays certain claims to Maryland residents who are involved in Maryland accidents with uninsured motorists or in hit-and-run incidents where no responsible party can be found.

To register a motor vehicle in Maryland, every owner must maintain basic primary coverage of $20,000/ $40,000 bodily injury, $10,000 property damage, and $2,500 economic loss coverage. Such compulsory insurance reduces substantially the number of uninsured claims. Nonetheless, uninsured claims continue due to hit-and-run accidents, out-of-state uninsured drivers, and Marylanders who do not comply with the law.

The Fund receives no General Funds from the State, nor are its assets part of the State Treasury. Current Fund assets derive from insurance premiums; earnings from investments; assessments (when required) levied against all automobile insurers; and funds recovered from uninsured motorists by the Uninsured Unit. The Fund also receives a portion of the penalties imposed by the Motor Vehicle Administration against uninsured motorists (Code Transportation Article, secs. 17-101 through 17-110; Insurance Article, secs. 20-101 through 20-701).

A thirteen-member Board of Trustees governs the Fund. Seven members are appointed by the Governor with Senate advice and serve at the pleasure of the Governor. Five are chosen for four-year terms by the Board of Directors of the Industry Automobile Insurance Association. One serves ex officio (Code Insurance Article, sec. 20-202).

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