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By:  Emily Devan, Esquire

Under COMAR, an insurer has 10 business days after determining that a motor vehicle of a first-party insured is a total loss to either value the car and make an offer of cash settlement or replace the vehicle (if the policy allows for the same).  “Business days” are days “other than Saturday, Sunday, a federal holiday, or a State holiday.”  As a result, 10 business days will generally be two weeks or slightly longer when there is a holiday.  However, for third-party claimants, the insurer has “10 days” to make an offer of cash settlement.  The Maryland Insurance Administration states that it has treated the “10 days” requirement to mean 10 calendar days, not 10 business days.

Under the proposed new regulation, both provisions will be changed to read “10 calendar days.”  This could significantly shorten the time an insurer has to make a cash settlement offer, or replace a totaled private passenger vehicle.  For example, if an insurer determined that a vehicle was a total loss on a Friday, the insurer would have only 6 business days to make a cash settlement offer, even assuming no intervening holidays.  Holidays could create a further time crunch in getting a cash settlement offer to an insured.  Despite the tighter time frame for first-party claims, the proposed regulation may make claims settlement simpler by creating a single timeline for the settlement of first and third party claims for motor vehicles declared a total loss.

The draft proposed regulation is available here:  At this time the comment period has ended, but no final action has been taken.

Emily Devan is an Associate in the firm’s General Litigation Group. Ms. Devan’s practice includes commercial litigation, insurance and insurance defense in state and federal courts throughout the country. She also has significant experience with litigation arising from or related to insolvency proceedings including bankruptcy cases, receiverships, and assignments for the benefit of creditors. Ms. Devan can be reached at (410) 339-6772 or