Substantial Revisions to Uninsured Motorist Coverage in Virginia
May 8, 2023
Virginia’s uninsured motorist statute (Section 38.2-2206 of the Insurance Article) has been substantially revised. The changes are effective for policies sold, issued, or delivered after July 1, 2023.
First, an under-insured motorist carrier can no longer obtain a credit against its policy for any payments made by a torfeasor’s liability insurer carrier, and any available under-insured motorist coverage essentially “stacks” atop the limits of any liability coverage. For example, previously if the torfeasor paid its limits of $25,000 in liability coverage and the under-insured motorist carrier carried limits of $50,000, the under-insured motorist carrier would have exposure of $25,000. For policies issued after July 1, 2023, the under-insured motorist carrier would not receive a $25,000 credit, and would be exposed to the full $50,000 of its coverage. This change may greatly increase the number of under-insured motorist claims.
Second, while prior version of Section 38.2-2206 specified the priority of coverage for losses where multiple under-insured motorist policies were available, it was silent as to the priority for a purely uninsured motorist claim. The revised version of Section 838.2-2206 now clarifies that the priority for uninsured and under-insured motorist policies are the same:
a. The policy covering a motor vehicle occupied by the injured person at the time of the accident; b. The policy covering a motor vehicle not involved in the accident under which the injured person is a named insured; c. The policy covering a motor vehicle not involved in the accident under which the injured person is an insured other than a named insured.
Finally, where there is more than one policy in any “category”, the coverage is proportional for both uninsured and under-insured motorist claims.