Do Maryland counties have to carry no-fault (PIP) and uninsured motorist coverage on their own vehicles?

Plain-English summary

The county attorneys for six Maryland counties (Prince George's, Harford, Howard, Anne Arundel, Baltimore, and Montgomery) jointly asked the Attorney General whether their self-insured county governments must carry no-fault personal injury protection (PIP) and uninsured motorist (UM) coverage on county vehicles, coverage the Motor Vehicle Administration otherwise requires of private self-insurers participating in its self-insurance program.

The opinion concluded counties do not have to provide PIP or UM coverage. It relied on two Court of Appeals decisions holding the State itself is not bound by the compulsory insurance law's PIP and UM requirements, because neither the insurance code nor the motor vehicle law specifically names the State (or, by the same reasoning, its political subdivisions) as required to provide those particular benefits, applying the general rule that the State and its subdivisions are not swept into legislation aimed at "persons" or "owners" unless a statute clearly includes them. The opinion also noted the Local Government Tort Claims Act's limited waiver of sovereign immunity for county employees' tortious acts covers tort liability only, not a separate statutory obligation to carry PIP or UM coverage. It closed by noting that counties remain free to offer this coverage voluntarily, and that even without it, an injured party without another source of recovery can still seek payment from the Maryland Automobile Insurance Fund's dedicated uninsured motorist fund.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific coverage requirement, statutory citation, or sovereign immunity rule mentioned here.

Common questions

If I'm hit by a county government vehicle in Maryland, does the county have to carry no-fault medical coverage the way a private driver does?
According to this opinion, no, a county is not statutorily required to carry PIP coverage on its self-insured vehicles, following the same reasoning Maryland courts applied to hold the State itself exempt from that requirement.

Can I collect from an uninsured-motorist fund if a county vehicle without UM coverage is at fault and the driver has no other insurance?
Not from the county directly under a UM coverage requirement, since the opinion found counties are not required to carry UM coverage. However, the opinion noted the Maryland Automobile Insurance Fund maintains a separate uninsured motorist fund that can be a source of recovery for a qualified claimant who has no other insurance available.

Are counties allowed to provide PIP and UM coverage even though the law doesn't force them to?
Yes. The opinion made clear that nothing prohibits a county from voluntarily including PIP and UM benefits in its self-insurance program; the opinion only concluded the law does not require it.

Background and statutory framework

Maryland is a compulsory automobile insurance state: registering a vehicle requires liability insurance or an approved substitute, including minimum PIP and UM coverage under the Insurance Article and Transportation Article §17-103. The Motor Vehicle Administration may accept self-insurance in place of a policy if it provides equivalent required benefits, and its regulations classify local governments as "Class C" self-insurers subject to a simplified security requirement, an elected official's and comptroller's guarantee letter, rather than the specific PIP/UM mandate applied to private self-insurers.

The opinion extended the reasoning of two Court of Appeals decisions, Harden v. Mass Transit Administration and Nationwide Mutual Ins. Co. v. USF&G, both holding the State itself is not bound by the compulsory insurance law's PIP and UM mandates because the statutes do not specifically name the State, applying the general canon that the State and its subdivisions are not covered by legislation directed at "persons" absent a clear and indisputable manifestation of legislative intent to include them, per City of Baltimore v. State. It also relied on an earlier, unpublished 1989 opinion of this Office applying that same reasoning to Baltimore City. The opinion surveyed a nationwide split of authority among other states on whether self-insurers generally must provide PIP and UM coverage, noting some jurisdictions treat a self-insurance certificate as the functional equivalent of an insurance policy (requiring the coverage) while others do not, though it ultimately rested its Maryland conclusion on the State-specific "State not bound absent clear intent" doctrine rather than resolving that broader debate.

Citations and references

Statutes:
- Transportation Article, §17-103, the compulsory insurance law's self-insurance provision
- Transportation Article, §17-103(b)(1)-(4), minimum liability, PIP, and UM coverage requirements
- Transportation Article, §17-104, requiring insurance or equivalent security to register a vehicle
- Transportation Article, §17-106(e)(2), referencing the Maryland Automobile Insurance Fund's uninsured motorist fund
- Insurance Article, §19-504, minimum liability coverage amounts
- Insurance Article, §19-505 and §19-509, PIP and UM coverage requirements
- Insurance Article, §19-906 and §19-910, the insured's ability to waive UM coverage above the statutory minimum and to waive PIP altogether
- Insurance Article, §20-601 et seq., the Maryland Automobile Insurance Fund's uninsured motorist assessment fund
- Courts & Judicial Proceedings Article, §5-301 et seq., the Local Government Tort Claims Act's limited waiver of sovereign immunity
- COMAR 11.18.02.01, 11.18.02.03A, and 11.18.02.04D(3), the MVA's self-insurance program regulations and Class C self-insurer security requirements

Cases:
- Enterprise Leasing Co. v. Allstate Insurance Company, 341 Md. 541, 549, 671 A.2d 509, 514 (1996), on the compulsory insurance law's purpose of compensating innocent third parties
- Nationwide Mutual Ins. Co. v. USF&G, 314 Md. 131, 550 A.2d 69 (1988), holding the State is not required to provide PIP or UM benefits
- Harden v. Mass Transit Administration, 277 Md. 399, 354 A.2d 817 (1976), holding a State transit agency was not required to provide PIP benefits
- City of Baltimore v. State, 281 Md. 217, 223, 378 A.2d 1326 (1977), the rule that the State is not bound by legislation absent a clear and indisputable intention
- Allstate Insurance Co. v. Shaw, 52 N.Y.2d 818, 820, 418 N.E.2d 388, 436 N.Y.S.2d 873 (1980), a New York court requiring UM coverage from self-insurers
- National Farmers Union Property & Casualty Co. v. Bang, 516 N.W.2d 313, 316 (S.D. 1994), a South Dakota court requiring UM coverage from self-insurers
- Wright v. Smallwood, 308 S.C. 471, 474, 419 S.E.2d 219 (1992), a South Carolina court requiring UM coverage from self-insurers
- Hartford Insurance Co. v. Hertz Corp., 410 Mass. 279, 285-86, 572 N.E.2d 1 (1991), a Massachusetts court requiring UM coverage from self-insurers
- Twyman v. Robinson, 255 Ga. 711, 712, 342 S.E.2d 313 (1986), a Georgia court requiring UM coverage from self-insurers
- Modesta v. Southeastern Pennsylvania Transportation Authority, 503 Pa. 437, 441-42, 469 A.2d 1019 (1983), a Pennsylvania court requiring UM coverage from self-insurers
- McSorley v. Hertz Corp., 885 P.2d 1343, 1350 (Okla. 1994), an Oklahoma court holding self-insurance is not an insurance policy subject to PIP/UM requirements
- Lipof v. Florida Power & Light Co., 596 So.2d 1005, 1008 (Fla. 1992), a Florida court reaching the same conclusion
- City of Gary v. Allstate Insurance Co., 612 N.E.2d 115, 118 (Ind. 1993), an Indiana court reaching the same conclusion
- Coltney v. New England Telephone and Telegraph Co., 600 A.2d 940, 941 (N.H. 1991), a New Hampshire court reaching the same conclusion
- Ellis v. Rhode Island Public Transit Authority, 586 A.2d 1055, 1060 (R.I. 1991), a Rhode Island court reaching the same conclusion
- Ross v. Transport of New Jersey, 114 N.J. 132, 553 A.2d 12, 15, 19 (1989), a New Jersey court on public entities and unsatisfied claim funds
- Nassau Insurance Co. v. Guarascio, 82 A.D.2d 505, 442 N.Y.S.2d 83, 88 (N.Y. App. Div. 1981), a New York court on public entities and unsatisfied claim funds

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/2000/85oag3.pdf

Original opinion text

COUNTIES

V EHICLE L AWS – M OTOR V EHICLE A DMINISTRATION –
I NSURANCE – M ARYLAND A UTOMOBILE I NSURANCE F UND –
C OUNTIES N OT R EQUIRED TO M AINTAIN PIP AND UM
C OVERAGE ON T HEIR V EHICLES

                     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.

                                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").[1] IA §§19-505, 19-509; TR §17-103(b)(3), (4).

   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.

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.[2] COMAR 11.18.02.03A.
Under those regulations, a local government is considered a "Class
C" self-insurer. The minimum security required for a Class C self-
insurer 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
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.

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
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.[3] See Enterprise Leasing Co., supra.

                             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

[1] An insured person may waive UM coverage in excess of the
statutory liability coverage requirements and may waive PIP coverage
altogether. IA §§19-906, 19-910.

[2] Courts in other states have split on the question whether self-
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).

[3] Courts in other jurisdictions have noted that claimants have
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).