There is no specific time frame governing when one must report a claim to an insurance company in Maryland. We need to draw a distinction here between what is known as a first-party insurance claim and a third-party insurance claim. In the context of a Maryland automobile accident wherein personal injuries are sustained, claims that are made against one’s own insurance company are called first-party claims. These would be things like personal injury protection [PIP] claims and potential property damage or rental expense claims. The claim made against the at-fault driver for damages resulting from the accident is called a third party claim. Certainly, you would need to report any loss to your own insurance company, and make any first-party claim as quickly as possible. Although there is no mandatory reporting deadline, the failure to timely report the claim may be deemed a failure to cooperate with your insurance company and could potentially result in a denial of insurance benefits.
Third party claims are treated differently. In Maryland, a lawsuit alleging personal injury resulting from negligence must be filed within three years of the injury-causing event. In theory, it would be possible to never notify an insurance company that a claim might be made against their insured, and, then simply file suit the day before the statute of limitations expired. For a variety of reasons, this is likely not a wise course of action. There are cogent reasons why it just makes sense to report a third party claim as quickly as possible.
- Giving the insurance company notice of a potential claim gives them the opportunity to timely investigate the loss. In a situation where responsibility for an accident is clear, this could lead to the insurance company accepting responsibility or liability for the loss, thus enhancing the possibility of a pre-suit resolution of the claim.
- Moreover, if the claim involves a governmental entity i.e. state, local or federal government, there are additional notice requirements and timeframes much shorter than the applicable statute of limitations. Prompt notice to the at-fault actor, or their insurance, ensures that these time frames are met.
- Timely notice to an at-fault party, or their insurance company, also creates an opportunity for your lawyer to require the preservation of relevant evidence such as surveillance footage, accident or incident reports and the like.
As a note, if you have out of state personal injury protection, there may be time frames in which you must report the accident. Some states to provide for short notice requirements for no-fault benefits e.g. New York.
*The Assembly has recently enacted a change in this process. Marylanders now have the option of carrying less insurance. An insured may now reject personal injury protection altogether, under specific circumstances. See Insurance Article, Md. INSURANCE Code Ann. § 19-506.1.
-This Article was updated by Eric Kirk on 8/22/19.