Virtually every auto policy includes under-insured motorist (UIM) coverage. When there is an accident and the person at fault (the “tortfeasor”) does not have sufficient insurance to cover the plaintiff’s damages, the plaintiff can turn to his/her own insurance company for under-insured motorist benefits.  So long as the plaintiff’s UIM coverage exceeds the amount of the tortfeasor’s liability insurance, a claim can be made under this coverage to bridge the gap between the tortfeasor’s limits of liability coverage and the plaintiff’s actual damages.   When the plaintiff’s insurance company has to pay UIM benefits to the plaintiff, it has the right of subrogation – the right to sue the defendant – to recover from the defendant personally the amount of the UIM benefits it had to pay.  It was very difficult to get these types of cases settled.  Under Section 19-511 of the Insurance Article, passed in 2006, the Maryland legislature set the requirements for streamlining the settlement process in cases involving UIM benefits. Upon receipt of a written settlement offer from the tortfeasor’s insurance carrier, an offer which represents the tortfeasor’s limits of coverage, the plaintiff must notify his/her own insurance company of the offer by certified mail.  The plaintiff’s UIM carrier then has sixty days to decide whether to (1) waive subrogation against the tortfeasor (and permit the plaintiff to proceed directly against his/her UIM carrier for the damages in excess of the tortfeasor’s policy) or (2) tender to the plaintiff the limits of the tortfeasor’s liability policy to preserve the UIM carrier’s right of subrogation against the tortfeasor. A year after the passage of Section 19-511 the Maryland Court of Appeals held that a UIM carrier that consented to a settlement between the plaintiff and the tortfeasor’s liability insurance carrier waived its right to defend the UIM action against it on liability grounds, i.e., a defense that the alleged tortfeasor was not negligent.  Thus, any UIM carrier that wanted to defend a case against it on liability grounds was required to tender the tortfeasor’s liability policy limits to the plaintiff.  The result of this ruling was that if there was any question of liability on the part of the alleged tortfeasor, and the UIM carrier wanted to maintain its subrogation claim against the alleged tortfeasor, it had to reject the settlement between the plaintiff and provide the plaintiff (its insured) the policy limits of the tortfeasor’s liability insurance.  The court’s ruling frustrated the intent of the original legislation which was to promote settlements between the plaintiff and the tortfeasor’s insurance company. The legislature amended Section 19-511 (effective October 1, 2012) to remedy this issue.  Now, the plaintiff’s UIM carrier is permitted to consent to the tortfeasor’s liability policy limits settlement with the plaintiff without waiving its ability to defend the UIM action on liability grounds.