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The Maryland Insurance Administration published a Bulletin addressed to all motor vehicle insurance companies, rating organizations, producers, agents, and the Maryland Automobile Insurance Fund (MAIF)–Maryland’s auto insurance residual market. The purpose of the Bulletin is to alert insurers or anyone authorized to issue motor vehicle insurance in the state of the requirements related to uninsured and underinsured coverage as they relate to diminution of value claims, and the Administration’s intention to enforce those requirements. 

UM and UIM coverage protect insureds in situations where they cannot fully recover from an at-fault uninsured or underinsured driver, or in hit-and-run situations. The Administration holds that UM and UIM coverage, which are required to be carried under Maryland law, must also cover the diminution of value (DV) of a motor vehicle. Diminution of value is the loss of value of a vehicle after it has been damaged and repaired–it is the difference between the vehicle’s market value before an accident and the lowered value even after it has been repaired following an accident. Maryland courts have held that the diminution of a vehicle’s value is a valid and compensable part of loss payment. 

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