Wednesday, March 24, 2010

car insurance in Maryland-raising of premium or cancellation

Online information makes much of our lives much more transparent. This includes our traffic and criminal records in Maryland which are available for the world to see on the Maryland judiciary web site. Car insurance companies peruse these lists regularly for their insureds. Based on what they find, they may be canceling insurance or raising the premiums. The question I sometimes receive is whether they can do this based on a disposition of probation before judgment. Probation before judgment in Maryland applies to many different types of criminal cases. It can apply all the way down to small traffic matters such as speeding and up to large criminal matters such as burglary. For purposes of this blog, it applies to the vehicle matters. It is my opinion that the bottom line is that they cannot raise your premiums based on a disposition of probation before judgment. However, they can cancel your policy for a probation before judgment.

The Maryland Insurance Administration “Consumer Guide to Auto Insurance” states as follows:



“NOTE: A “Conviction” includes a plea of nolo contendere and a finding of probation before judgment (PBJ). Maryland law specifically recognizes these exceptions for cancellation or nonrenewal…

However, compare, Insurance Article, Section 11-215 provides:



(e) For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21-202.1 or § 21-809 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16-205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16-117(b) of the Transportation Article.



and Section 11-318 provides:



(e) For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21-202.1 or § 21-809 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16-205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16-117(b) of the Transportation Article.

Please note, this only applies to a higher premium. The insurance company can cancel the driver under the policy even with probation before judgment. I believe that the below regulations make that more clear:

COMAR 31.15.10.03

E. Action Based on Criminal Conduct.

(1) In the case of private passenger motor vehicle insurance, standards that meet the business purposes standard and do not require statistical validation include a standard that allows cancellation or nonrenewal of coverage if the named insured or a covered driver under the policy is convicted of:

(a) Operating the motor vehicle while intoxicated, or impaired by drugs;

(b) Committing homicide, reckless endangerment, or criminal negligence arising out of the operation of the motor vehicle; or

(c) Using the motor vehicle to participate in a felony.

(2) If a named insured or covered driver is found guilty of a crime listed in §E(1) of this regulation, and the guilty finding subsequently is struck, and the final disposition of the matter is probation before judgment, the guilty finding:

(a) May be used as evidence that the named insured or covered driver committed the conduct listed in §E(1) of this regulation; but

(b) Is not conclusive proof that the named insured or covered driver committed the conduct listed in §E(1) of this regulation and may be rebutted by evidence showing that the insured or covered driver did not commit the conduct.

Friday, March 12, 2010

Even if it is only a minor matter you need to defend in a civil suit

Recently I had a young man come into my office. At the age of 17 he was in his father's car and he bumped the back of the plaintiff's car. There was virtually no property damage on his car and very slight property damage on the Honda minivan-approximately $900. The woman in the van got out and they exchanged information. She seemed fine. The only problem was that my client had no insurance on the vehicle-Dad forgot to pay.

2 1/2 years later my 17 year old is sued for $30,000. The woman had evidence of $20,000 in medical expenses which included one surgery on her knee and evidence that she had a ruptured disc in her neck. Apparently neither of these problems were evident prior to the accident.

I told my client that because he was served needed to defend himself. If he did nothing, it was a substantial likelihood that a judgment of $30,000 would be entered against him. That judgment would stand for at least 12 years. During those 12 years the insurance company could attempt to garnish his wages, seize his property, go after his bank accounts, etc. Further, his license would be suspended until he paid off that judgment. In Maryland, if you have an accident while you are driving an uninsured vehicle and a judgment is entered against you, the motor vehicle administration will suspend your license until you satisfied that judgment or work out an acceptable payment plan with the judgment creditor.

We went to court and reviewed the plaintiff's evidence. It was clear that my client accidentally rear-ended the plaintiff's vehicle. They had the complete medical records showing the above described problems. Strangely, the insurance company did not have their plaintiff immediately present. On the other hand, we were ready for trial. The plaintiff had the burden of collecting their evidence in a timely fashion to prove in court on the trial date. They were not ready. Had they gone forward that day they would've lost everything because they were not prepared. Now it is possible that the plaintiff could have continued to case to collect their evidence but that was not definite-the judge could have denied the request for postponement. Based on this uncertainty, based on the fact that the plaintiff was only 17 when the accident happened, we were able to settle this case at $1500 and some of that was going to come out of my legal fee because the case turned out to be significantly easier than I had anticipated.

By hiring an experienced attorney and preparing a defense, my client was able to reduce his exposure from $30,000 down to $1500 and he was able to protect his driver's license.