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Libby v. Government Employees Insurance Co.6/12/1989
forded by the policy. Appellant contended that he was actually misled by GEICO's agent, Ms. Waters; he testified he specifically asked her what was the maximum amount of uninsured motorist coverage he could get and was told $20,000 for injury to one person and $40,000 for all persons injured in a single occurrence. The court, however, found that Mr. Libby was mistaken in that regard; that it was GEICO's policy to inform prospective policyholders that they are entitled to have uninsured motorist coverage up to the maximum of their liability coverage; and that it was by reason of a misunderstanding or lack of communication, rather than any intentional or negligent misrepresentation, that appellant was not informed of the availability of the additional coverage. The court also
expressly found that if Mr. Libby had fully understood his right to obtain the additional coverage he would have paid the extra premium and obtained $500,000/$1,000,000 uninsured motorist coverage.
In the fall of 1985, about 90 days prior to the expiration of the initial term of the policy, GEICO sent appellant a renewal solicitation package that contained, in addition to a questionnaire, a quantity of promotional material, i.e., information as to various kinds of insurance offered by GEICO. Included among that material was a form advising policyholders of the availability of uninsured motorist coverage in excess of the statutory minimum, up to the liability limits of the policy. The court expressly found that neither appellant nor his wife read any of the promotional or advertising material in the package and thus made no conscious decision not to avail themselves of the opportunity to increase the amount of the uninsured motorist coverage. The court reiterated its finding that appellant would have purchased the additional coverage if he had known it was available.
I
Maryland Code Ann., art. 48A, ยง 541(c)(2), provides that every policy of motor vehicle liability insurance issued, sold, or delivered in this state shall contain coverage, in at least the amounts required under Title 17 of the Transportation Article of the Annotated Code of Maryland, for damages which the insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injuries sustained in an accident arising out of the ownership, maintenance, or use of that vehicle. At present, the statute further provides:
There shall be available to the insured the opportunity to contract for higher amounts than those provided under
Title 17 of the Transportation Article if those amounts do not exceed the amounts of the motor vehicle liability coverage provided by the policy.
The initial question that is presented by the facts of this case is what obligation does the statute impose on the insurer? Clearly, an insurer that told its policyholders that the maximum coverage obtainable was the required minimum of $20,000/$40,000 would (1) be guilty of a fraudulent or at least negligent misrepresentation and (2) would not be complying with the statutory mandate that there be available to the insured an opportunity to contract for a higher amount than the required minimum. That situation, however, is not the case here. Judge Cave found as a fact that GEICO did not make an intentional or negligent misrepresentation. But is it enough to refrain from misrepresenting the fact of availability? Is there an affirmative obligation on the part of an insurance carrier to inform its policyholders that additional coverage is available? It is certainly argu
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