Kurtz v. Erie Insurance Exchange

Maryland Code (1997), § 19-509(g) of the Insurance Article establishes the limit of liability of a carrier of uninsured/underinsured (“UM”) benefits. That section authorizes a UM carrier to require that an insured “exhaust” the liability limits of a tortfeasor’s insurance policy before applying for and receiving underinsured motorist (“UM”) benefits under the insured’s policy. We are asked in this case to decide what is meant by the term “exhaust.” For the reasons that follow, we hold that the exhaustion requirement in § 19—509(g) means that an insured must have been paid the full amount of…