The basic property and casualty concepts are covered in the national basics guides: insurable interest, indemnity, negligence, occurrence and claims-made coverage, and valuation. This guide collects the Maryland rules that apply across P&C lines:

• the contributory negligence rule
• the 45-day underwriting period
• cancellation and nonrenewal notices and statements of actual reason
• claim handling
• the Joint Insurance Association
• rates and other Insurance Article rules

Auto and homeowners specifics are in the Maryland personal auto and homeowners guides.

Contributory negligence

Maryland keeps the common-law rule of contributory negligence. A claimant who is even slightly at fault, even 1%, generally recovers nothing from the other party. In Coleman v. Soccer Ass'n of Columbia (2013), Maryland's high court declined to switch to comparative negligence and left any change to the legislature. Maryland is one of only a few states with this rule.

Liability policy rules

• Insolvent insureds (§ 19-102). Every liability policy must say that the insured's bankruptcy or insolvency doesn't release the insurer, and that an unpaid judgment creditor may sue the insurer up to the policy limit.
• Late notice (§ 19-110). An insurer may disclaim coverage because the insured failed to give notice or cooperate only if it proves the failure caused actual prejudice.
• Suit limits (§ 12-104). A policy clause giving less time to sue than state law allows is void.

The underwriting period (§ 12-106; COMAR 31.08.15)

• Scope. New personal, commercial property and commercial liability policies and binders have a 45-day underwriting period starting on the effective date.
• Cancellation during the period. The insurer gives 15 days' notice stating the actual reason, or 10 days for nonpayment.
• Recalculated premium. If the insurer finds a material risk factor but the risk is still acceptable, it recalculates the premium and notifies the insured. An insured who then cancels gets a pro rata refund.

Cancellation and nonrenewal

Personal insurance (§ 27-602):

• Cancellation (other than for nonpayment) or nonrenewal needs 45 days' notice by a first-class mail tracking method.
• Midterm cancellation is limited to:
  • fraud or misrepresentation
  • public-safety threats
  • increased hazard
  • nonpayment
  • arson conviction, for homeowners
• The first notice must mention the possible right to replace coverage under the Maryland Property Insurance Availability Act.

Commercial insurance (§ 27-603):

• 45 days' notice for cancellation (other than for nonpayment) or nonrenewal, with proof of mailing.
• Midterm cancellation is limited to listed reasons, such as a license suspension tied to the driving record for commercial auto.

Nonpayment. Cancelling any policy for nonpayment needs at least 10 days' notice.

Statement of actual reason (§§ 27-604, 27-605):

• The insurer gives a clear and specific statement of the actual reason. Vague phrases such as "personal habits" or "living conditions" aren't enough.
• A commercial insured may ask for more information within 30 days, and the insurer answers within 15 days.

Renewal increases (§ 27-608). A commercial or workers' comp renewal premium increase of more than 15% needs 45 days' notice.

Withdrawing a line (§ 27-606). An insurer leaving an entire P&C line files a withdrawal plan 180 days ahead.

Missed notices (§§ 27-610, 27-612):

• An insurer that doesn't follow the notice rules is liable for the coverage that would have been in effect.
• If no renewal notice was sent, it must renew if the insured pays within 30 days of discovering the lapse.

Claims (COMAR 31.15.07; Insurance Article Title 27)

• First-party investigations. If an investigation isn't finished within 45 days, the insurer explains in writing why it needs more time, and repeats that every 45 days.
• Denials. A denial based on a specific exclusion must name the provision.
• Records. Denial records are kept 3 years.
• Good faith. In first-party P&C claims, good faith means an informed judgment based on honesty and diligence, supported by evidence. Before suing for bad faith, the insured files a complaint with the MIA (§ 27-1001). Failing to act in good faith can cost up to $125,000 per violation (§ 27-305).
• Collecting premium (§ 27-216). A producer may not collect more or less than the filed premium.

Joint Insurance Association (Ins. Title 25, Subtitle 4)

• The Maryland Property Insurance Availability Act created the Joint Insurance Association (JIA). It provides essential property insurance and homeowners insurance to people who can't get it in the voluntary market (§§ 25-402, 25-406).
• What it covers. Essential property insurance covers fire, lightning, explosion, windstorm, hail, smoke, aircraft, vehicles, riot and vandalism. It excludes auto and inland marine (§ 25-401).
• Membership. It is required of every insurer writing essential property insurance directly. Members share profits and losses in proportion to their premiums (§ 25-403).
• Status. The JIA is not a state agency, and its debts are its own (§ 25-404).
• Inspections are done without cost to the owner (§ 25-407).
• Pricing is meant to be self-supporting and not compete with the voluntary market.

Rates and underwriting

• Rates (§§ 11-306, 11-307). P&C rates may not be excessive, inadequate or unfairly discriminatory. Insurers file rates on or before their effective date, a file-and-use system.
• Geographic refusals (§ 19-107). An insurer may refuse property or auto coverage solely because of location only after filing a statement designating the area at least 60 days ahead, with an objective basis.
• Prohibited reasons (§ 27-501). Insurers may not refuse coverage based on race, color, creed, sex or blindness, or for arbitrary or unfairly discriminatory reasons. At a hearing on such a refusal, the insurer carries the burden of persuasion.
• Antiarson applications (COMAR 31.08.01). Where required, such as commercial monoline fire in designated areas, coverage can't be bound until the antiarson application is returned. If Part 2 isn't returned within 20 days, the insurer may cancel.
• Premium finance companies (Title 23) must register with the Commissioner. They secure loans with the unearned premium and keep a financial safeguard, such as a net worth of at least $250,000.

Insolvency

The Property and Casualty Insurance Guaranty Corporation pays the part of each covered claim over $100 and under $300,000. Workers' comp is paid in full. Surplus lines isn't covered (§§ 9-303, 9-306).

Common exam traps

• Maryland uses contributory negligence: any fault bars recovery.
• New policies have a 45-day underwriting period, with 15 days' cancellation notice (10 for nonpayment).
• After that period, cancellation and nonrenewal need 45 days' notice. Nonpayment needs 10.
• The insurer must give a clear and specific actual reason.
• An insurer can disclaim for late notice only with actual prejudice.
• The JIA is Maryland's residual property market, and it excludes auto.
• The P&C guaranty corporation pays claims over $100 and under $300,000.