Personal Injury Blog

Maryland Court of Appeals Broadens the Scope of Auto Insurance Coverage to Compensate Accident Victims

By: Matthew Tievsky

Practically every auto insurance policy provides that when a motor vehicle owner drives his/her own car, the owner is covered by the car's insurance policy. Therefore, if the owner of a vehicle negligently hurts you, you can sue the owner and recover money from his/her insurance policy. Practically every auto insurance policy also provides that if the owner of a motor vehicle lends the vehicle to someone, then that driver is also covered by the insurance policy. But if the owner lends the car to someone – let's call him John – and then John lends the car to someone else – let's call her Amy – and then Amy drives and negligently hurts you, is Amy covered by the insurance policy?Maryland Auto Accident Attorney

If the answer is yes, then you'll have no problem getting money from Amy if you sue her, because the insurance policy will cover her. But if the answer is no, then you could have a serious problem. There may not be any insurance coverage, which means that even if you sue Amy and win, you may only be able to get money to the extent you can actually force her to pay you out of her own pocket – which will be difficult if her pockets aren't deep. (This risk is a reason that it's a good idea to purchase an uninsured motorist policy, which covers you in case an uninsured driver hits you.)

So what is the answer? In 2014, in the case of Payne v. Erie Insurance Exchange, Maryland's intermediate appellate court, the Court of Special Appeals, ruled that Amy only gets insurance coverage if (1) she was driving the car on John's behalf, and (2) John was in the car with her. But just recently, the Court of Appeals – Maryland's high court – overruled that decision, and announced a more expansive rule: If the owner allows John to use the vehicle, and then John asks Amy to drive the car to do something for John, then Amy is covered by insurance, even if John is not in the car. Not only that, but Amy may be covered even if the owner said that Amy was not allowed to use the car, so long as Amy was running an errand for John. The effect of the high court's decision in Payne is that now, auto insurance coverage will apply in a broader range of cases, which increases the chances that an injured person will be able to obtain compensation for their injuries after an auto accident.

If you have been in an auto accident and there is a question whether the person who hit you is covered by insurance, you should contact the personal injury attorneys at Chaikin, Sherman, Cammarata & Siegel, P.C. for a free consultation.