Maryland
How Chicago Insurance Co. v. Newport News applies in Maryland: state-specific rules, key cases, and bar exam notes for Insurance Law.
Maryland follows the principle established in Chicago Insurance Co. v. Newport News that insurers must provide coverage as stated in the policy, particularly focusing on clear language and reasonable expectations of the insured. The state adheres to an objective standard that looks at how a reasonable insured would interpret the terms of the insurance policy.
In Maryland, an insurance policy must be construed in favor of the insured, and coverage must be provided unless explicitly excluded within the policy language.
The court held that exclusions in insurance contracts must be clearly stated and cannot mislead the insured regarding their coverage.
This case reaffirmed that ambiguities in the insurance policy are to be resolved in favor of the insured's reasonable expectations.
The court ruled that an insurance company cannot deny coverage based on an interpretation that diverges from a reasonable reading of the policy.
Unlike many federal approaches which may apply a stricter interpretation of policy exclusions, Maryland emphasizes the reasonable expectations of the insured and favors coverage interpretations. This focus on the insured’s perspective can lead to broader coverage outcomes in Maryland compared to federal standards.
The principles from Chicago Insurance Co. v. Newport News are relevant for the Maryland bar exam, especially in discussing policy interpretation and the duty of good faith in insurance contracts.