In most states, drivers operating motor vehicles are required by law to have proof of standard automobile liability coverage before they are legally allowed to drive. Private insurance companies, however, are not required by the same token to grant coverage to all individuals. Where then, do drivers who have records too damaged for any insurance company to grant coverage turn?
Most states handle this problem by randomly assigning uninsurable motorists to an insurance carrier in their particular state. Individuals who have been randomly assigned must pay much higher rates than a regular driver would pay. This also puts the insurers in the position of being required to protect drivers who they originally denied coverage for. In Maryland though, those drivers deemed "at-risk" can turn to the Maryland Automobile Insurance Fund.
Created in 1972, MAIF is a state operated insurance pool limited to Maryland residents who have been denied coverage by at least two private insurers or who have had their current policy annulled. MAIF policy holders who remain accident-free for three consecutive years are required to withdraw from the program and automatically become ineligible for its benefits unless the policyholder is again denied coverage from at least two private insurance carriers. In this situation, policyholders are allowed to reapply for MAIF coverage.
A significant difference in MAIF and other insurance policies is that MAIF cannot be sold on an installment plan. MAIF policyholders must either pay in full upfront or utilize a third-party policy premium finance company. Over 1,500 private insurance agents are authorized to sell MAIF policies, making it readily available to all residents of Maryland. As long as they meet the straightforward qualifications, an individual's place of residence should not keep them from obtaining coverage.
MAIF, depending on its rate structure for revenue, is a self-sufficient entity. It offers many different levels of liability (the amount of damage covered for in case of an accident). In Maryland, the minimum level of liability coverage is "30/60/15". This translates to $30,000 covering bodily injury per person, $60,000 covering bodily injury in total, and $15,000 covering total property damage. This is the cheapest option under the MAIF umbrella, but individuals can pay higher premiums to have higher coverage (up to "100/300/100").
The Uninsured Division, a separate program managed by MAIF, was created by statute to pay claims to Maryland residents injured in a car accident who have no other source of recovery or collectible insurance. This program protects those who do not own a vehicle that could provide them with coverage or live with a relative that might have a policy that could provide them with coverage. This coverage is only applicable in instances where both the vehicle they were riding in and the vehicle that caused the accident do not have some type of insurance. Also, in order to be a valid claim, the driver must be "negligent-free" meaning they did not contribute to the damages in any way.